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From Wikipedia:

Many critics of trade liberalization, such as Noam Chomsky, Tariq Ali, Susan George, and Naomi Klein, see the Washington Consensus as a way to open the labor market of underdeveloped economies to exploitation by companies from more developed economies. The prescribed reductions in tariffs and other trade barriers allow the free movement of goods across borders according to market forces, but labor is not permitted to move freely due to the requirements of a visa or a work permit. This creates an economic climate where goods are manufactured using cheap labor in underdeveloped economies and then exported to rich First World economies for sale at what the critics argue are huge markups, with the balance of the markup said to accrue to large multinational corporations. The criticism is that workers in the Third World economy nevertheless remain poor, as any pay raises they may have received over what they made before trade liberalization are said to be offset by inflation, whereas workers in the First World country become unemployed, while the wealthy owners of the multinational grow even more wealthy.

Anti-globalization critics further claim that First World countries impose what the critics describe as the consensus's neoliberal policies on economically vulnerable countries through organizations such as the World Bank and the International Monetary Fund and by political pressure and bribery. They argue that the Washington Consensus has not, in fact, led to any great economic boom in Latin America, but rather to severe economic crises and the accumulation of crippling external debts that render the target country beholden to the First World.

Many of the policy prescriptions (e.g., the privatization of state industries, tax reform, and deregulation) are criticized as mechanisms for ensuring the development of a small, wealthy, indigenous elite in the Third World who will rise to political power and also have a vested interest in maintaining the local status quo of labor exploitation.

Some specific factual premises of the critique as phrased above (especially on the macroeconomic side) are not accepted by defenders, or indeed all critics, of the Washington Consensus. To take a few examples,[29] inflation in many developing countries is now at its lowest levels for many decades (low single figures for very much of Latin America). Workers in factories created by foreign investment are found typically to receive higher wages and better working conditions than are standard in their own countries' domestically-owned workplaces. Economic growth in much of Latin America in the last few years has been at historically high rates, and debt levels, relative to the size of these economies, are on average significantly lower than they were several years ago.

Despite these macroeconomic advances, poverty and inequality remain at high levels in Latin America. About one of every three people - 165 million in total- still live on less than $2 a day. Roughly a third of the population has no access to electricity or basic sanitation, and an estimated 10 million children suffer from malnutrition. These problems are not, however, new: Latin America was the most economically unequal region in the world in 1950, and has continued to be so ever since, during periods both of state-directed import-substitution and (subsequently) of market-oriented liberalization.[30]

Some socialist political leaders in Latin America are vocal and well-known critics of the Washington Consensus, such as Venezuelan President Hugo Chávez, Cuban ex-President Fidel Castro, Bolivian President Evo Morales, and Rafael Correa, President of Ecuador. In Argentina, too, the recent Peronist party government of Néstor Kirchner undertook policy measures which represented a repudiation of at least some Consensus policies (see Continuing Controversy below). However, with the exception of Castro, these leaders have maintained and expanded some successful policies commonly associated with the Washington Consensus, such as macroeconomic stability and property rights protection.

Others on the Latin American left take a different approach. Governments led by the Socialist Party of Chile, by Alan García in Peru, by Tabaré Vázquez in Uruguay, and by Luiz Inácio Lula da Silva in Brazil, have in practice maintained a high degree of continuity with the economic policies described under the Washington Consensus (debt-paying, protection to foreign investment, financial reforms, etc.). But governments of this type have simultaneously sought to supplement these policies by measures directly targeted at improving productivity and helping the poor, such as education reforms and subsidies to poor families conditioned on their children staying in school.


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[Aug 22, 2019] Anti-China Cult Gets U.S. Government Money - Runs Large Pro-Trump Ad Campaign

Aug 22, 2019 | www.moonofalabama.org

jb , Aug 21 2019 18:32 utc | 1

"The Democrats could up their game by taking a deeper look into this issue." you mean the CIA democrats like Mark Warner? the US has nothing to offer the world except war, which is why the people of the US must destroy this country. there is 1000% bipartisan agreement on the war drive against both china & russia. both parties spend their days yelling at each other about who is the most commie, like Moscow Mitch or Comrade Nancy, b/c they are unified in their war drive. as they are on anything else that matters. this country exists to wage war, as the platform for projection of power, against competitors. nothing else. the illusion that any of the operators w/in the system, any of them at all, are doing anything but crafting a persona in relation to power for self-aggrandizement, not challenging power in the slightest, is not helpful.

ab initio , Aug 21 2019 18:56 utc | 2

b, what makes you think the Democrats are not in on the scam?

Also, just like the US funds NGOs in other countries, China too spends hugely and has bought many influential lobbyists and think-tanks as well as media personalities and politicians in the US. Not very different than Israel lobbyists through AIPAC and the massive Israel First big money. China influence operations in the US is likely significantly larger than US influence operations in China since China is a closed CCP controlled system.

psychohistorian , Aug 21 2019 18:57 utc | 3
b wrote
"
The Democrats could up their game by taking a deeper look into this issue.
"
I agree with jb at comment #1

Yes there are "good" Democrats which are very much in the minority. The rest D/R are acolytes for the God of Mammon finance/war based social order of the West.

Yes, we are in a very strange WWIII with lots of spinning plates and propaganda action and shedding of blood mostly where the Western public does not "see" it

vk , Aug 21 2019 19:15 utc | 5
Well, unless the crisis catches the USA first:

Deficit Will Reach $1 Trillion Next Year, Budget Office Predicts

This time, the world may not be able to prop the Dollar up : the "rest of the world" is also maxed out.

karlof1 , Aug 21 2019 20:37 utc | 15
Excellent work b! Funding what on the surface appears to be a propaganda op aimed at another nation becomes a form of campaign finance for a president's reelection campaign! I wonder how many such funds went to similar work on previous occasions?

It seems that at some point in time those within the Outlaw US Empire deemed it unimportant that other nations learn the funding for numerous NGOs seeking to subvert them are overtly financed by the USG and are thus not NGOs at all but CIA appendages; and that despite the overtness, the USG still claims those organizations to be legitimate NGOs.

I find it worthy in an ironic manner that the USA will soon be eclipsed by the nation it might have become had it not sought to be a global empire. In fact, it's the very product of those Open Door policy advocates that will soon become the bane of their descendants who opted for a financialized Free Lunch economy for themselves instead of a massively robust, resilient industrial/commercial economy for all Americans.

William Gruff , Aug 21 2019 20:40 utc | 16
Falun Gong is kinda like Scientology crossed with Amway. Get rich quick while simultaneously healing your goiters. In its best days it was a terrible scam. Now it is just a blunt instrument that the US State Department uses to try and beat China with.
FSD , Aug 21 2019 21:01 utc | 18
The Epoch Times' Jeff Carlson has been in the thick of uncovering the broad Democratic Party coup (in league with transnational intelligence assets) against the Trump Presidency. Thus b's depiction here of the Dems potentially acting in the role of white knight subverts mountains of evidence. As for Falun Gong's potential affiliations with the CIA and NED that's another quite plausible storyline altogether.
DrivelP , Aug 21 2019 21:32 utc | 19
Funny thing, after watching a Vesti News video on youtube I saw a video ad for the Epoch Times. It had a young white millennial saying a bunch of propaganda drivel about the evil communist Chinese with regards to the Hong Kong protests.

Money is flowing.

[Aug 20, 2019] Is the So-Called Manufacturing Renaissance a Mirage

Without suppression of Wall Street speculators the renaissance on manufacturing is impossible...
Notable quotes:
"... A tooling firm closes, and a complex organism withers. The machinery is sold, sent to the scrapyard, or rusts in place. The manuals are tossed. The managers retire and the workers disperse, taking their skills and knowledge with them. The bowling alley closes. The houses sell at a loss, or won’t see at all. Others, no doubt offshore, get the contracts, the customers, and the knowledge flow that goes with all that. All this causes hysteresis. “The impact of past experience on subsequent performance” cannot be undone simply by helicoptering a new plant in place and offering some tax incentives! To begin with, why would the workers come back? ..."
Aug 20, 2019 | www.nakedcapitalism.com

If I lived in the past, I might assume that re-industrialization would be as easy as building a new plant and plopping it down in my model town; "build it and they will come." But this America is not that America. Things aren't that frictionless. They are not, because of a concept that comes with the seventy five-cent word hysteresis attached, covered here in 2015. Martin Wolf wrote :

"Hysteresis" -- the impact of past experience on subsequent performance -- is very powerful. Possible causes of hysteresis include: the effect of prolonged joblessness on employability; slowdowns in investment; declines in the capacity of the financial sector to support innovation; and a pervasive loss of animal spirits.

(To "loss of animal spirits" in the entrepreneurial classes we might add "deaths of despair" in the working class.) And if there were a lot of people like me, living in the past -- in a world of illusion -- that too would would cause hysteresis, because we would make good choices, whether for individual careers, at the investment level, or at the policy level, only at random.

Our current discourse on a manufacturing renaissance is marked by a failure to take hysteresis into account. First, I'm select some representative voices from the discourse. Then, I will present a bracing article from Industry Week, " Is US Manufacturing Losing Its Toolbox? " I'll conclude by merely alluding to some remedies. (I'm sure there's a post to be written comparing the policy positions of all the candidate on manufacturing in detail, but this is not that post.)

The first voice: Donald Trump. From " 'We're Finally Rebuilding Our Country': President Trump Addresses National Electrical Contractors Association Convention " (2018):

"We're in the midst of a manufacturing renaissance -- something which nobody thought you'd hear," Trump said. "We're finally rebuilding our country, and we are doing it with American aluminum, American steel and with our great electrical contractors," said Trump, adding that the original NAFTA deal "stole our dignity as a country."

The second voice: Elizabeth Warren. From " The Coming Economic Crash -- And How to Stop It " (2019):

Despite Trump's promises of a manufacturing "renaissance," the country is now in a manufacturing recession . The Federal Reserve just reported that the manufacturing sector had a second straight quarter of decline, falling below Wall Street's expectations. And for the first time ever , the average hourly wage for manufacturing workers has dropped below the national average.

(One might quibble that a manufacturing renaissance is not immune from the business cycle .) A fourth voice: Trump campaign surrogate David Urban, " Trump has kept his promise to revive manufacturing " (2019):

Amazingly, under Trump, America has experienced a 2½-year manufacturing jobs boom. More Americans are now employed in well-paying manufacturing positions than before the Great Recession. The miracle hasn't slowed. The latest jobs report continues to show robust manufacturing growth, with manufacturing job creation beating economists' expectations, adding the most jobs since January.

Obviously, the rebound in American manufacturing didn't happen magically; it came from Trump following through on his campaign promises -- paring back job-killing regulations, cutting taxes on businesses and middle-class taxpayers, and implementing trade policies that protect American workers from foreign trade cheaters.

Then again, from the New York Times, " Trump Promised a Manufacturing Renaissance. What Happens in 2020 in Places That Lost Those Jobs ?" (2019):

But nothing has reversed the decline of the county's manufacturing base. From January 2017 to December 2018, it lost nearly 9 percent of its manufacturing jobs, and 17 other counties in Michigan that Mr. Trump carried have experienced similar losses, according to a newly updated analysis of employment data by the Brookings Institution.

Perhaps the best reality check -- beyond looking at our operational capacity, as we are about to do -- is to check what the people who will be called upon to do the work might think. From Industry Week, " Many Parents Undervalue Manufacturing as a Career for Their Children " (2018):

A mere 20% of parents associate desirable pay with a career in manufacturing, while research shows manufacturing workers actually earn 13%more than comparable workers in other industries.

If there were a manufacturing renaissance, then parents' expectations salaries would be more in line with reality (in other words, they exhibit hysteresis).

Another good reality check is what we can actually do (our operational capacity). Here is Tim Cook explaining why Apple ended up not manufacturing in the United States ( from J-LS's post ). From Inc. :

[TIM COOK;] "The products we do require really advanced tooling, and the precision that you have to have, the tooling and working with the materials that we do are state of the art. And the tooling skill is very deep here. In the US you could have a meeting of tooling engineers and I'm not sure we could fill the room. In China you could fill multiple football fields.

"The vocational expertise is very very deep here, and I give the education system a lot of credit for continuing to push on that even when others were de-emphasizing vocational. Now I think many countries in the world have woke up and said this is a key thing and we've got to correct that. China called that right from the beginning."

With Cook's views in mind, let's turn to the slap of cold water administered by Michael Collins in Industry Week, " Is US Manufacturing Losing Its Toolbox? ":

So are we really in the long-hoped-for manufacturing renaissance? The agency with the most accurate predictions on the future of jobs is the Bureau of Labor Statistics. Their projection to 2026 shows that US manufacturing sector will lose 736,000 manufacturing jobs. I spoke with BLS economists James Franklin and Kathleen Greene, who made the projections, and they were unwavering in their conclusion for a decline of manufacturing jobs.

This prompted me to look deeper into the renaissance idea, so I investigated the changes in employment and establishments in 38 manufacturing North American Industry Classification System (NAICS) industries from 2002 to 2018. I really hoped that the optimists were right about the manufacturing renaissance, but the data I collected in Table 1 (see link) shows some inconvenient truths -- that 37 out of the 38 manufacturing industries are declining in terms of both number of plants and employees.

So, yeah. Mirage.

... ... ...

A tooling firm closes, and a complex organism withers. The machinery is sold, sent to the scrapyard, or rusts in place. The manuals are tossed. The managers retire and the workers disperse, taking their skills and knowledge with them. The bowling alley closes. The houses sell at a loss, or won’t see at all. Others, no doubt offshore, get the contracts, the customers, and the knowledge flow that goes with all that. All this causes hysteresis. “The impact of past experience on subsequent performance” cannot be undone simply by helicoptering a new plant in place and offering some tax incentives! To begin with, why would the workers come back?

So, when I see no doubt well-meant plans like Warren’s “Economic Patriotism” — and not to pick on Warren — I’m skeptical. I’m not sure it’s enough. Here are her bullet points:

There’s a lot to like here, but will these efforts really solve the hysteresis that’s causing our tooling problem? Just spit-balling here, but I’d think about doing more. Start with the perspective that our tooling must be, as much as possible, domestic. (“If your business depends on a platform, you don’t have a business.” Similarly, if your industrial base depends on the tooling of others, it’s not an industrial base.)

As tooling ramps up, our costs will be higher. Therefore, consider tariff walls, as used by other developing nations when they industrialized. Apprenticeships and training are good, but why not consider skills-based immigration that brings in the worker we’d otherwise have to wait to train?

Further, simply “training” workers and then having MBAs run the firms is a recipe for disaster; management needs to be provided, too.

Finally, something needs to be done to bring the best and brightest into manufacturing, as opposed to having them work on Wall Street, or devise software that cheats customers with dark patterns. It’s simply not clear to me that a market-based solution — again, not to pick on her — like Warren’s (“sustainable investments,” “research investments,” “R&D investments,” “export promotion,” and “purchasing power”) meets the case.

It is true that Warren also advocates a Department of Economic Development “that will have a single goal: creating and defending good American jobs.” I’m not sure that’s meaningful absent an actual industrial policy, democratically arrived at, and a mobilized population (which is what the Green New Deal ought to do).

[Aug 20, 2019] Trumponomics on the march: Israeli and EU farmers say thank you to Trump .

Notable quotes:
"... "The sentiment out in farm country is getting grimmer by the day," said John Heisdorffer, the chairman of the American Soybean Association. "Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these tariffs is mounting. ..."
"... The Republican senator Chuck Grassley, who represents Iowa, a state heavily reliant on agriculture, has called for a quick resolution to the dispute. "Americans understand the need to hold China accountable, but they also need to know that the administration understands the economic pain they would feel in a prolonged trade war," Grassley said in a statement. ..."
May 14, 2019 | www.theguardian.com

American farmers are likely to feel the pain first. Soybean exports to China collapsed last year when the trade war began, and agricultural exports will be hit harder when, or if, the new tariffs are imposed. Farmers are also suffering from extensive flooding that has delayed planting.

"The sentiment out in farm country is getting grimmer by the day," said John Heisdorffer, the chairman of the American Soybean Association. "Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these tariffs is mounting."

The new round of tariffs will hit other parts of the US food industry, with beans, lentils, honey, flour, corn and oats all on the list of goods that will be taxed.

... ... ...

The Republican senator Chuck Grassley, who represents Iowa, a state heavily reliant on agriculture, has called for a quick resolution to the dispute. "Americans understand the need to hold China accountable, but they also need to know that the administration understands the economic pain they would feel in a prolonged trade war," Grassley said in a statement.

[Aug 20, 2019] China Warns Trump It Won't Make Trade Concession If US Plays Hong Kong Card

Aug 20, 2019 | www.zerohedge.com

China Warns Trump It Won't Make Trade Concession If US "Plays Hong Kong Card"

by Tyler Durden Tue, 08/20/2019 - 09:15 0 SHARES

Just days after Trump for the first time linked the ongoing Hong Kong protests with his assessment of the US-China trade war, Beijing has issued an ultimatum to the White House: the United States should not link trade negotiations with China to the Hong Kong protests, denouncing such a move as a miscalculation.

In a short commentary published by Communist Party mouthpiece People's Daily late on Monday, the author said that events in Hong Kong were the internal affairs of China, and linking them with trade negotiations was a "dirty" aim.

"Making a fuss about Hong Kong will not be helpful to economic and trade negotiations between China and the US," the commentary said. " They would be naive in thinking China would make concessions if they played the Hong Kong card " the oped cautioned.

Chinese diplomatic observers also said Beijing considered the worsening situation in Hong Kong a sovereignty issue and would be highly unlikely to cave to Washington's pressure.

The remarks followed a statement by US Vice-President Mike Pence on Monday which reiterated President Donald Trump's demand to tie the largely stalled trade talks with Hong Kong's deepening crisis, a day after hundreds of thousands of people marched peacefully in defiance of repeated intimidation from Beijing. In an address at the Detroit Economic Club on Monday, Pence said the Trump administration would continue to urge Beijing to resolve differences with the protesters peacefully and warned that it would be harder for Washington to make a trade deal with Beijing if there was violence in the former British territory. Separately, Mike Pompeo said that China should allow Hong Kong protesters the freedom to express themselves, in what China saw as clear interference in its own internal matters.

The Chinese article countered by saying that the top priority for Hong Kong was to stop violence and restore order, adding that US politicians should not send the wrong message to people creating chaos in the city. "In the face of political intimidation, we not only dare to say no, but also take countermeasures," it warned.

Global Times, a tabloid controlled by the flagship state-run newspaper People's Daily, also warned in an editorial on Monday that American political and public opinion elites should not harbour the illusion they could influence China's decisions on Hong Kong.

"Because of the trade war, the US has lost the ability to impose additional pressure on China," it said.

"The US should stop its meaningless threat of linking the China-US trade talks with the Hong Kong problem. Beijing did not expect to quickly reach a trade deal with Washington. More Chinese people are prepared that China and the US may not reach a deal for a long time."

Chinese analysts noted Trump appeared to have hardened his stance on Hong Kong in the past week or so, under growing pressure from US lawmakers and extensive media coverage of the increasingly violent protests. Indeed, it was only a month ago when we reported that " Trump Abandoned Support For Hong Kong Protests To Revive Trade Talks With Beijing ." Now that trade war is once again front and center, with Trump using it as leverage for further Fed rate cuts, the US president is once again refocusing his attention on Hong Kong.

As the SCMP writes , Trump initially focused on making a deal with China ahead of his 2020 re-election bid and adopted a hands-off approach by characterizing the protests as "riots" which were a matter for China to handle. Over the past few days, he suggested Chinese President Xi Jinping should resolve the situation by meeting with protest leaders and warned that any violence in the handling of the Hong Kong crisis would exacerbate difficulties for attempts to bring an early end to the trade war.

"Trump's about-face on Hong Kong, from being neutral to piling pressure on Beijing, is largely due to domestic political pressure ahead of the presidential elections," said Shi Yinhong, an international relations expert at Renmin University and an adviser to the State Council which is China's cabinet.

" But the Hong Kong issue concerns China's sovereignty and the government's ability to maintain stability, which in Beijing's view is of superior priority . China cannot afford to make much compromise and will do everything to fend off interventions from abroad, in spite of all the risks and ramifications," he said.

Despite the soured mood between China and the US over their spiralling trade war – as well as escalating tensions over Huawei, Taiwan and other geopolitical rifts – both sides were planning further trade talks in the coming 10 days, according to White House chief economic adviser Larry Kudlow on Sunday.

Any progress would be virtually impossible with analysts cautioning that the US attempt to "play the Hong Kong card" would further complicate the trade talks.

Meanwhile, in the latest significant escalation in diplomatic tensions, China responded angrily to Washington's decision on a US$8 billion sale of F-16 fighter jets to Taiwan and Trump's warning against Huawei citing national security threats.

"When a long list of old problems between the two countries remains unsolved, the US side is now ramping up the pressure on Hong Kong," said Shen Dingli, a professor of US studies at Fudan University. "China has so far refused to make concessions in the absence of adequate mutual respect and trust and I don't think we'll have much room to compromise on Hong Kong or other issues. We'll have to wait and see what the US would do next," he said.

Shi also said none of the flashpoints in the bilateral ties – from Hong Kong, Taiwan, to the South China Sea and the denuclearisation of North Korea – had any easy solution in sight, with both sides showing little willingness to cooperate and accommodate the other's interests. He said the increasingly hardline, confrontational approach on China by Trump – who faced mounting pressure in his bid for re-election, especially amid signs of a looming global economic recession – would only make a trade deal increasingly unattainable.

"Even if there were no Hong Kong crisis, could the US and China reach a trade deal? Even if Beijing caved into Washington's pressure on Hong Kong, would it make it easier for them to bridge their glaring differences in the trade talks and cut a deal?"

Of course not, and since Trump is far more interested in keeping trade war simmering and on the verge of a substantial escalation if only to keep the Fed on its toes and ready for far more aggressive rate cuts, and even "some quantitative easing", that's precisely what the US president wants.

[Aug 20, 2019] The immigrant , whether skilled or much more likely unskilled, is the slave in this arrangement for whatever period of time he or she is paid significantly below what was, or what would of been, the prevailing real time local costs of labor without the immigration taking place or the immigrant being present.

Aug 16, 2019 | www.unz.com
Mevashir , says: August 14, 2019 at 11:49 pm GMT
@geokat62

Amazing Tony Martin lecture with David Irving

[Aug 17, 2019] Charge us More by Michael Hudson

Aug 15, 2019 | michael-hudson.com

Trump's claim that China is paying for the tariffs is completely false and basically serves to redirect income from his poor supporters to his wealthy supporters.

Not only that, the policy will have the consequence of further isolating the United States, says Michael Hudson.

[Aug 16, 2019] A New Assessment of the Role of Offshoring in the Decline in US Manufacturing Employment naked capitalism

Aug 16, 2019 | www.nakedcapitalism.com

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https://c.deployads.com/sync?f=html&s=2343&u=https%3A%2F%2Fwww.nakedcapitalism.com%2F2019%2F08%2Fa-new-assessment-of-the-role-of-offshoring-in-the-decline-in-us-manufacturing-employment.html <img src="http://b.scorecardresearch.com/p?c1=2&c2=16807273&cv=2.0&cj=1" /> By Christoph Boehm, Assistant Professor of Economics, University of Texas at Austin, Aaron Flaaen, Senior Economist, Research and Statistics Division, Federal Reserve Board, and Nitya Pandalai-Nayar, Assistant Professor of Economics, University of Texas at Austin. Originally published at VoxEU

What has caused the rapid decline in US manufacturing employment in recent decades? This column uses novel data to investigate the role of US multinationals and finds that they were a key driver behind the job losses. Insights from a theoretical framework imply that a reduction in the costs of foreign sourcing led firms to increase offshoring, and to shed labour.

One of the most contentious aspects of globalisation is its impact on national labour markets. This is particularly true for advanced economies facing the emergence and integration of large, low-wage, and export-driven countries into the global trading system. Contributing to this controversy, between 1990 and 2011 the US manufacturing sector lost one out of every three jobs. A body of research, including recent work by Bloom et al. (2019), Fort et al. (2018) and Autor et al. (2013), has attempted to understand this decline in manufacturing employment. The focus of this research has been on two broad explanations. First, this period could have coincided with intensive investments in labour-saving technology by US firms, thereby resulting in reduced demand for domestic manufacturing labour. Second, the production of manufacturing goods may have increasingly occurred abroad, also leading to less demand for domestic labour.

New Facts on Manufacturing Employment, Trade, and Multinational Activity

On the surface, the second explanation appears particularly promising. Manufacturing employment declined from nearly 16 million workers in 1993 to just over 10 million in 2011, shown by the black line in Figure 1. This large decline in manufacturing employment coincided with a surge in outward foreign direct investment (FDI) by US firms (the blue line in Figure 1). Nevertheless, existing theories of trade and multinational production make ambiguous predictions regarding the link between foreign production and US employment. Further, due to a lack of suitable firm-level data on US multinationals, there has been limited research on their role in the manufacturing employment decline (see Kovak et al. 2018 for a recent exception).

Figure 1 US manufacturing employment and US outward FDI

Source : BEA for FDI; Longitudinal Business Database (LBD) and authors' calculations for employment.

In a recent paper, we address the question of whether foreign input sourcing of US multinationals has contributed to a decline in US manufacturing employment (Boehm et al. 2019). We construct a novel dataset, which we combine with a structural model to show that US multinationals played a leading role in the decline in US manufacturing employment. Our data from the US Census Bureau cover the universe of manufacturing establishments linked to transaction-level trade data for the period 1993-2011. Using two directories of international corporate structure, we augment the Census data to include, for the first time, longitudinal information on the direction and extent of firms' multinational operations. To the best of our knowledge, our dataset is the first to permit a comprehensive analysis of the role of US multinationals in the aggregate manufacturing decline in the US. With these data, we establish three new stylised facts.

Fact 1: US-owned multinationals were responsible for a large share of the aggregate manufacturing employment decline
Our first finding is that US multinational firms, defined as those US-headquartered firms with foreign-owned plants, contributed disproportionally to the decline in US manufacturing employment. While 33.3% of 1993 employment was in multinational-owned establishments, this group directly accounted for 41% of the subsequent decline.

Fact 2: US-owned multinationals had lower employment growth rates than similar non-multinationals
In Figure 2, we show that multinationals exhibited consistently lower net job creation rates in the manufacturing sector, relative to other types of firms. Compared to purely domestic firms and non-multinational exporting firms, multinationals created fewer jobs or shed more jobs in almost every year in our sample. Of course, these patterns may not be causal, and other characteristics of multinationals could be driving the low job creation rates. To address this concern, we control for all observable plant characteristics, and find that multinational plants experienced lower employment growth than non-multinational owned plants in the same industry, even when the size and age of the plants are held constant.

Figure 2 Net US manufacturing job creation rates by type of US firm

Source : Authors' calculations based on the LBD, Directory of Corporation Affiliations (DCA), and Longitudinal Foreign Trade Transactions Dataset (LFTTD)

Fact 3: Newly multinational establishments experienced job losses, while the parent multinational firm expanded imports of intermediate inputs
An alternative way to assess the role of multinational activity on US employment with our data is to use an 'event study' framework. We compare the employment growth trajectories of newly multinational-owned plants to otherwise similar plants in terms of industry, firm age, and plant size. As can be seen in Figure 3a, prior to the plants becoming part of a multinational, their growth patterns are not different from the control group. However, in the years following the multinational expansion, there is a brief positive but then sustained negative trajectory of employment at these manufacturing plants. Ten years after the transition, these newly multinational-owned plants have manufacturing employment that is about 20% smaller than an otherwise similar plant.

Figure 3 US employment and import dynamics at new multinational plants

a) Relative imports

b) Cumulative relative employment (Index)

Source : Authors' calculations based on LBD, DCA, and LFTTD.

Further, these newly multinational firms increase imports following the expansion abroad. As Figure 3b demonstrates, these firms substantially increase imports both from related parties and other firms (at arms-length), relative to their control group. Taken together, Figures 3a and 3b suggest that offshoring might explain the observed negative relationship between trade and employment.

Structural Analysis: Did the Offshoring of Intermediate Input Production Result in a Net Employment Decline in the US at the Firm Level?

While the patterns we identify above are suggesting that increased foreign input sourcing by multinational firms led to a decrease in US manufacturing employment, they are not necessarily causal. Standard models of importing, such as Halpern et al. (2015), Antras et al. (2017) or Blaum et al. (2018), make ambiguous predictions as to whether foreign sourcing is associated with increases or decreases in domestic employment. At the heart of this ambiguity are two competing forces. First, a reduction in the costs of foreign sourcing leads firms to have access to cheaper intermediate inputs. As a result, their unit costs fall and their optimal scale increases. This 'scale effect' raises their US employment. On the other hand, firms respond by optimally reallocating some intermediate input production towards the location with lower costs. This 'reallocation effect' reduces US employment. Theoretically, the scale effect could dominate the reallocation effect and lead to positive employment effects of offshoring, or vice versa.

We use our microdata to estimate the relative strengths of these two competing forces. We show that in a conventional class of models and in partial equilibrium, the value of a single structural constant – the elasticity of firm size with respect to firm production efficiency – completely determines which of the two forces dominates. Our estimation approach is to develop a method to structurally estimate an upper bound on this constant using our data on the universe of US manufacturing firms. While a high value of the upper bound leaves open the possibility that foreign sourcing and domestic employment are complements, a low value of the bound unambiguously implies that the two are substitutes.

Our estimates of the bound are small, indicating that during the period 1993-2011, the reallocation effect was much larger than the scale effect. In other words, during this period of aggregate manufacturing employment decline, multinationals' foreign input sourcing was leading to a net decline of manufacturing employment within these firms.

Aggregate Implications for US Manufacturing Employment

It is important to point out that the model we use only speaks to employment changes within existing firms and does not take into account general equilibrium forces that can also affect employment. Since such general equilibrium effects are inherently difficult to assess, estimates of how much of the observed aggregate decline can be attributed to offshoring of multinational firms are uncertain and often require strong assumptions. We thus proceed under two alternative sets of assumptions. In the first, we conduct a simple partial equilibrium aggregation exercise, which uses observed changes in firm cost shares of domestic inputs together with our estimated parameter bounds to obtain model-implied predictions of the employment loss due to foreign sourcing. This approach captures both the direct impact of foreign sourcing by existing firms as well as the first-order impact on domestic suppliers, holding all else equal. Under the second, we model these indirect, general equilibrium effects, such as firm entry and exit, explicitly. In both of these scenarios, we find that the offshoring activities of multinationals explains about one-fifth to one-third of the aggregate US manufacturing employment decline.

Policy Implications

Our research shows that the global sourcing behaviour of US multinational firms was an important component of the manufacturing decline observed in the past few decades. These firms set up production facilities abroad and imported intermediate goods back to the US, with the consequence of reduced demand for domestic manufacturing workers. While our research suggests that offshoring had a negative impact on employment, we caution that it does not support the view that offshoring and trade should be contained with tariffs or other policy interventions. Previous research has shown that both trade and offshoring are critical for consumers' access to affordable goods in the US. Instead, our research implies that government assistance for displaced manufacturing workers could facilitate their transition to new jobs in other sectors.

Authors' note: Any opinions or conclusions expressed herein are those of the authors and do not necessarily represent the view of the US Census Bureau or the Board of Governors or its research staff.

See original post for references

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Louis Fyne , August 16, 2019 at 10:29 am

It's not just big-ticket manufacturing (appliances, etc) .little stuff that a nation uses on a daily basis has been off-shored as well -- electrical wiring, capacitors, even foodstuffs like cookies and candy.

Bobby Gladd , August 16, 2019 at 11:04 am

Rx, military equipment parts

https://regionalextensioncenter.blogspot.com/2019/08/china-rx.html

upstater , August 16, 2019 at 10:51 am

"our research implies that government assistance for displaced manufacturing workers could facilitate their transition to new jobs in other sectors."

How does the research make such an implication? Every person a gig worker, I suppose?

Synoia , August 16, 2019 at 3:56 pm

our research implies .could facilitate their transition

Can we pay our bills with the "implied" income?

"implied" < 40% probability, "facilitated" < 40% probability, overall probability < 16%.

Nice, less than 1 in 4 get a new job.

rd , August 16, 2019 at 11:10 am

I think an overlooked aspect is environmental protection and labor working conditions as well as wages.

We are offshoring our pollution by moving manufacturing to other countries with much less stringent environmental regulation. Similarly, labor rules in those countries don't require as much worker safety, so we are offshoring injuries as well.

As the other countries become wealthier and more educated, they are starting to push for more of these protections as well as higher wages which is forcing the companies to move their production again to keep their costs low.

An interesting recent trend is the rejection of our "recycling" from countries that used to receive it, so the feel-good greenwashing of filling the recycling bins is started to boomerang back to North America as countries ship back the trash parts of the recycling. This will likely require a second recycling revolution with more domestic processing of recycling or an admission that it simply isn't going to happen in which case the righteousness quotient of many suburbanites is going to plummet.

Tyronius , August 16, 2019 at 3:07 pm

This is such an easy problem to solve from a policy standpoint- and it has been solved by countries as small as the Netherlands.

Legally mandate a small list of fully recyclable materials for manufacturers to use in production and packaging, and enforce it with punitive tariffs on non conforming goods. This can take many forms, one logical option being that of holding companies responsible for the costs of recycling their products.

This is as applicable to soda bottles as it is to large and complex products like automobiles; BMW is a world leader in lifecycle waste reduction and recycling of vehicles.

As usual, the impediment isn't technology or consumerism, it's corporate profitability and one time costs of adjusting the supply chain.

neo-realist , August 16, 2019 at 11:15 am

So the writer says "that government assistance for displaced manufacturing workers could facilitate their transition to new jobs in other sectors." I take it to mean that a policy such as "free college" as advocated by Sanders which would involve government funded vocational training in other sectors would go a long away toward helping those displaced by outsourcing?

David Carl Grimes , August 16, 2019 at 11:27 am

It's just another version of "Let them eat training!"

Inode_buddha , August 16, 2019 at 11:51 am

I remember all that BS back in the 80's and 90's everybody was on the bandwagon about careers in computers, or any other hi-tech. I was one of those who had *some* training at least .. right before they offshored all those jobs to India. It was a double kick in the nuts.So, manufacturing went to China, computing went to India. And people wonder why I'm so bitter and cranky sometimes.

Napoleon: "Money has no Fatherland. Financiers are without patriotism and without shame. Their sole object is gain." IMHO US manufacturing is the reason why we're not all speaking German today. And we gave all that capacity away like a bunch of lemmings over the cliff

Katniss Everdeen , August 16, 2019 at 12:35 pm

"that government assistance for displaced manufacturing workers could facilitate their transition to new jobs in other sectors."

This "implies" that there are "jobs in other sectors" that create as much economic value, expertise and "innovation" as manufacturing jobs do. What are they–"service" jobs? Taking in each other's laundry? Delivering McDonald's to your door? Netflix?

Manufacturing is not just a job category that can be changed out for something shiny and new, it's vital infrastructure that represents a nation's ability to provide for itself, and to create a standard of living that reflects that capability. Those "affordable goods" so important to american "consumers" are manufactured goods. It's not just the price to buy them, it's the ability to make them that's important.

Like it or not, the once mighty american economy was built on the mightiest manufacturing capacity that the world had ever known. Trivializing it as being only about cheap stuff is a colossal mistake. We used to know that, and we've only begun to pay the price for forgetting.

polecat , August 16, 2019 at 2:43 pm

We* might very well learn to make lasting things of value again .. on a lesser scale, after half the population is dead from despair, war, and disease ..

*not necessarily as one people, however ..

Summer , August 16, 2019 at 3:31 pm

40 years later?!?! This is the conclusion. Note it's still not being done effectively.

They are full of it.

They may have an effective retraining program once there are about 10 manufacturing workers left in the country

Punxsutawney , August 16, 2019 at 6:15 pm

Let me tell you how useful this is in replacing your income when your 50 and the manufacturing you supported is gone.

Not so much!

sierra7 , August 16, 2019 at 11:58 am

Outsourcing of manufacturing jobs by multi-nationals contributed to job losses ..
Really! LOL!
30 years too late for this info.
Wasn't hard to see even way back in the 1980's how multi-nationals were working very hard to export jobs and import their "anti-labor" behaviour they were excising outside the laws and borders of the US.

Synoia , August 16, 2019 at 12:26 pm

Dear Mr Trump

Tariffs were historically used to protect domestic manufacturers. Both the fees and increased price were use to boot domestic manufacturing, and hence domestic employment.

What's you intention for the tariff money?

doug , August 16, 2019 at 2:23 pm

So , you are implying there is a plan in the man's head?

Synoia , August 16, 2019 at 2:45 pm

No, I'm asking if he has one.

I'm implying nothing.

Trump makes a lot of noise. I'm also familiar with the proverb "Empty Vessels make the most Noise."

MyLessThanPrimeBeef , August 16, 2019 at 5:21 pm

That's a little different from the Zen story about the empty tea cup being more receptive.

The Rage , August 16, 2019 at 5:13 pm

Yes, during the wave of industrialization. But they don't work so well once consolidation starts. 1875-1925(roughly) was the golden age of US manufacturing, even the WWII bounce was government DoD driven. Private ex-DoD manufacturing peaked in 1924 and was flat since then. Then we have the 97-05 downwave which then has boosted us about back to 1925's ex-DoD high. Just like the tech wave, it ended.

I mean, by 1925 Portsmouth Ohio was done by 1925, by 1950 they just bled manufacturing while it consolidated around bigger cities after WWII.

We need self-efficiency not capitalists growth. It ain't happening people. Its over. We need 10% contraction of GDP just to get manufacturing growing again from a much lower base. Tariffs are dead in the water for growth now, and act like the opposite. They are also creating a bubble in "base" consumption while killing domestic production and yes, eventually overcapacity will kill base consumption and it crash again like last years 4th quarter driving down domestic manufacturing further.

Samuel Conner , August 16, 2019 at 12:38 pm

Anecdotally, in a field I worked in for a while, middle management in a small privately owned "needle trades" firm, the "growth" among our competitors was in firms that (we assumed) did their design work in US but manufactured overseas. Domestic manufacturers either adapted to this, or closed down.

At least in this field, automation had next to nothing to do with it.

cirsium , August 16, 2019 at 12:54 pm

Instead, our research implies that government assistance for displaced manufacturing workers could facilitate their transition to new jobs in other sectors.

Ah yes, the subsidised retraining for manufacturing jobs that, in fact, do not exist. Louis Uchitelle covered this policy failure in his 2006 book "The Disposable American: Layoffs and their consequences". Is the phrase "got the T-shirt" relevant here?

Susan the other` , August 16, 2019 at 1:23 pm

For the government to re-employ workers who have lost their factories would be a form of industrial policy. Ours is never clearly stated, if there is one. But one thing is clear and that is the government gave the internationals every opportunity to offshore our national productivity without any safety net for labor except unemployment insurance. Which runs out. Michael Pettis has just backed a proposal to tax foreign capital saving and investment here in this country. Because most of it is just financial "investments". Foreign investment for long term capital projects would be virtually unaffected. It is claimed that this tax on money parking would reduce out trade deficit and make it fluctuate within an acceptable balance. By doing something that sounds like real-time exchange rate adjustments for every transacted trade, now to include foreign investment and savings. So why didn't the government, after offshoring all those jobs, re-employ all the laid-off workers as banking and investment managers? So all this unproductive foreign money is skewing our trade balance. Making our unemployment deeply structural. It is so bizarre that we are "trading" in money at all. We are trading in the medium of exchange, which is fiat, which itself is susceptible to exchange rate adjustments with other money and all of it supposedly backed by the productivity of that country. That foreign productivity is frequently nothing more than IMF money, stolen and taken out of the country. The P word. Because the world has reached manufacturing overcapacity, I assume, all this money is totally skewing the ledgers. It's laughable except for the fact that the bean counters take it seriously. The mess we are in is something more fundamental than balanced exchange rates. It's more like hoarding at its most irrational. Way over my head. And for us to fix unemployment here in the US will take far more than a tax on all this loose international money.

Inode_buddha , August 16, 2019 at 1:40 pm

Yeah it's nice to have it "officially" credentialed etc its not like I haven't been saying this since they passed NAFTA, but then I wasn't "credentialed" so nobody listened . its like, "No $#!t sherlock ???" pretty much *everyone* who has spent some time in the industrial sectors knows this by heart without even needing to be told. Of course maybe now its OK to say it out loud or something . smh.

Glen , August 16, 2019 at 2:25 pm

Can we also admit that American CEOs gave our jobs away?

Inode_buddha , August 16, 2019 at 2:59 pm

Dirty furriners sho didn't steal em trying to get *anyone* to admit this is like pulling teeth

MyLessThanPrimeBeef , August 16, 2019 at 5:19 pm

It's good people are asking questions.

Jerry B , August 16, 2019 at 2:33 pm

===the Role of Offshoring in the Decline in US Manufacturing Employment===

It is not just the role of offshoring in the decline of US manufacturing employment, BUT the effect the offshoring, and the competing with foreign manufacturers, had on the existing US manufacturing workforce. The manufacturers and manufacturing workers that remain in the US have to compete with their cheaper foreign competition for work.

I spent most of the last 25 years working in plastics injection molding. After spending the first six years of my career in plastics/ polymer research and development, I transitioned to injection molding. In the mid 90's when I started in injection molding, globalization had already begun especially in the automotive sector. The car manufacturers were already setting up global and domestic supply chains. But even then the Chicago area (and the US in general) was heavy in mold making and injection molding businesses.

Then China became a major player in the world economy, NAFTA started, etc. and in the early 2000's it was like the last manufacturer who gets stuck in the US gets to turn out the lights!

There were a lot of small to medium size mold maker shops and plastic injection molders in the Chicago area that went under because they could not compete with the cheaper foreign competition. It was very sad as I knew many small mom and pop mold makers and injection molders in the Chicago area who were in business for 20 – 30+ years that closed.

The fact that many businesses/corporations in the US, due to offshoring and globalization, are forced to compete with foreign competitors that have cheaper labor, less regulation, cheaper land costs, etc. etc. is beyond reason.

And to this day you can see the effects of neoliberal globalization in any manufacturing or other business you visit as they are dealing with consequences of having to compete directly with cheaper foreign competitors through cost cutting, low wages, and running the employees into the ground.

The tables were tilted against manufacturers and manufacturing employees in the US. It is like the US manufacturing (and other sectors) are trying to fight a battle with one hand tied behind our backs.

There is a good book that relates to this post. The book is called Failure to Adjust: How Americans Got Left Behind in the Global Economy by Edward Alden.

https://www.amazon.com/Failure-Adjust-Americans-Economy-Relations-ebook/dp/B01M03S1R4

The Rage , August 16, 2019 at 5:04 pm

NAFTA killed a bunch of material extraction jobs, but boosted a bunch of auto production jobs down the supply chain. You can see that on the data. Granted, auto sales have been flat for 20 year which has led to a flattening of employment growth since 2005 after the material extraction driven drop.

That is why the Trump Administration just basically rebooted it.

John , August 16, 2019 at 3:41 pm

Has there been a study of a relationship between off-shoring and the rise of upper management compensation?

Susan the other` , August 16, 2019 at 4:22 pm

can the government itself, operating under a vague constitution, be treasonous?

Subaltern , August 16, 2019 at 4:48 pm

Consider it payback for colonialism and neocolonialism.

The Rage , August 16, 2019 at 4:52 pm

lol, but it created a bunch of debt finance jobs throughout the economy as well, that boosted existing manufacturing. Offshoring accounts for .1% of the job loss. Most of it is consolidation and technology. My great grandfather lost his job in 1925 during the first wave of consolidation. What about that?

This post reeks of globalist propa.

Altandmain , August 16, 2019 at 5:09 pm

As someone working in manufacturing, while I am glad that there is some acknowledgement that outsourcing is responsible, I strongly disagree about not implementing tariffs. Effectively workers are competing for a race to the bottom in wages, working conditions, and other factors like environmental laws.

Guess what if there are tariffs? Things will cost more, but there will also be more jobs for the working class. Actually there will also be quite a few white collar jobs too. Engineering, HR, Finance, Sales, etc, are all needed in any manufacturing industry.

I suspect that net, most workers would be better off even if prices were higher due to the jobs. The thing is, the top 10 percent would not be and the 1 percent would not be. That's the main reason for this outsourcing. To distribute income upwards so the rich can parasitically take it.

While our research suggests that offshoring had a negative impact on employment, we caution that it does not support the view that offshoring and trade should be contained with tariffs or other policy interventions. Previous research has shown that both trade and offshoring are critical for consumers' access to affordable goods in the US. Instead, our research implies that government assistance for displaced manufacturing workers could facilitate their transition to new jobs in other sectors.

This is where I strongly disagree. As discussed above, I think that the net effect might be beneficial for the majority of society.

The other is the old retraining claims, which never pan out. What jobs are there? Visit the communities in the Midwestern US and Southern Ontario. Retraining for what? For jobs that are part time, minimum wage, with few or no benefits?!

Manufacturing may not have been perfect, but at least there were benefits, it was often full time, and the salaries allowed a middle class existence.

When I read things like this, as much as I dislike Trump, I can understand why people would support him.

sierra7 , August 16, 2019 at 7:13 pm

For the life of me I don't see how any other outcome could have happened. With the economic system we have embraced at least in my long lifetime, it was inevitable that "capital" would seek the lowest level playing field in the long term. Nation's boundaries kept that flow "fenced" to a certain limit for as long as there have been physical borders between countries. Once the cat was let out of the bag of competing countries after WW2, for example the Japanese with computer driven machinery (lathes) that crushed American companies that in too many cases refused to invest and welcomed the slow destruction of organized labor here in the US, it was inevitable that that condition would be the future of manufacturing here. The advent of the Mexican maquiladoras gave a great push to the exporting of jobs. NAFTA put the nails in the coffin so many more of those good paying jobs. "Labor" was never invited to those global meetings that proved to be so destructive to so many countries.
But, again. The system we embrace can have no other outcome. "Tariffs" will eventually lead to wars. So in the words of that famous Russian: "What is to be done?"
Anybody have a solution? You will be saving civilization from itself. We need a complete rethinking of how we live on this planet. That will take better humans that we have now that lead nations. In the meantime it's, "kill them all and let God sort them out!" The weak will succumb; the strong will continue to battle for territory, in this case jobs, jobs, jobs.

Rick , August 16, 2019 at 8:35 pm

For a look at what the numbers have been for the past half century:

Manufacturing employment

It's surprisingly linear, and the inflection point at the last recession is curious.

[Aug 15, 2019] The Evangelicals Trying to Turn America Into a Theocracy"

Aug 15, 2019 | economistsview.typepad.com

im1dc , August 14, 2019 at 08:35 AM

...

https://www.thedailybeast.com/the-family-on-netflix-the-shadowy-christian-cabal-puppeteering-american-politicians

"The Family': The Evangelicals Trying to Turn America Into a Theocracy"

'Netflix's new five-part series "The Family," now streaming, explores an elite coalition of Christians with enormous influence in American politics'

by Nick Schager...08.14.19...7:07AM ET

"According to The Family, Netflix's unnerving new five-part documentary series, the most powerful club in America is a consortium of religious true believers bound by their fanatical love of Jesus. It has no official membership and requires no dues. It works overtime to avoid publicity. Its ranks are comprised of both Republicans and Democrats.

And it seeks the eradication of the separation of church and state in its quest for its most coveted asset: power...

...Think of it as a Christian mafia endeavoring to create a global theocracy under Jesus, with grassroots enclaves around the USA (and planet) and a commitment to conducting "non-consensual diplomacy" with tyrants -- by elected American officials who claim their overseas efforts are just "Jesus stuff" -- as part of a "worldwide spiritual offensive." With a depth and breadth that amplifies its terrifying conclusions, The Family lifts the veil of secrecy surrounding this shadowy outfit, and what it reveals is a new world order that's not only on its way -- it's already here."

[Aug 15, 2019] Why a Banking Heiress Spent Her Fortune on Keeping Immigrants Out

Aug 15, 2019 | economistsview.typepad.com

im1dc , August 14, 2019 at 03:48 PM

A MUST READ in its entirety

Be prepared to have your mind blown

https://www.nytimes.com/2019/08/14/us/anti-immigration-cordelia-scaife-may.html

"Why a Banking Heiress Spent Her Fortune on Keeping Immigrants Out"

'Newly unearthed documents reveal how an environmental-minded socialite became an ardent nativist whose money helped sow the seeds of the Trump anti-immigration agenda'

By Nicholas Kulish and Mike McIntire...Aug. 14, 2019

"She was an heiress without a cause -- an indifferent student, an unhappy young bride, a miscast socialite. Her most enduring passion was for birds.

But Cordelia Scaife May eventually found her life's purpose: curbing what she perceived as the lethal threat of overpopulation by trying to shut America's doors to immigrants.

She believed that the United States was "being invaded on all fronts" by foreigners, who "breed like hamsters" and exhaust natural resources. She thought that the border with Mexico should be sealed and that abortions on demand would contain the swelling masses in developing countries.

An heiress to the Mellon banking and industrial fortune with a half-billion dollars at her disposal, Mrs. May helped create what would become the modern anti-immigration movement. She bankrolled the founding and operation of the nation's three largest restrictionist groups -- the Federation for American Immigration Reform, NumbersUSA and the Center for Immigration Studies -- as well as dozens of smaller ones, including some that have promulgated white nationalist views."...

[Aug 13, 2019] Trump Is Delaying Tariffs on China for Holiday Shopping Season

Aug 13, 2019 | economistsview.typepad.com

im1dc , August 13, 2019 at 09:46 AM

Ho Ho Ho

https://www.thedailybeast.com/trump-is-delaying-tariffs-on-china-for-holiday-shopping-season?ref=home

"Trump Is Delaying Tariffs on China for Holiday Shopping Season"

by Shira Feder...08.13.19...11:04AM ET

"The Trump administration announced Tuesday that tariffs set to be imposed Sept. 1 on Chinese consumer products like electronics, sneakers, and video game consoles will not go into effect until Dec. 15."...

Fred C. Dobbs , August 13, 2019 at 09:50 AM
(Ho, ho, ho!)

US to Delay Some China Tariffs Until Stores Stock
Up for Holiday Shoppers https://nyti.ms/2H50NMv
NYT - Ana Swanson - August 13

The Trump administration on Tuesday narrowed the list of Chinese products it plans to impose new tariffs on as of Sept. 1, delaying levies on cellphones, laptop computers, toys and other consumer goods until after stores stock up for the back-to-school and holiday shopping seasons. Stocks soared on the news.

The move, which pushed a new 10 percent tariff on some goods until Dec. 15 and spared others entirely, came as President Trump faces mounting pressure from businesses and consumer groups over the harm they say the continuing trade war between the United States and China is doing.

Mr. Trump's earlier tariffs on Chinese imports were carefully crafted to hit businesses in ways that everyday Americans would mostly not notice. But his announcement this month of the 10 percent tariff on $300 billion of Chinese goods meant consumers would soon feel the trade war's sting more directly.

On Tuesday, Mr. Trump acknowledged as much.

"We're doing this for the Christmas season," he told reporters around noon. "Just in case some of the tariffs would have an impact on U.S. customers." ...

Fred C. Dobbs said in reply to Fred C. Dobbs... , August 13, 2019 at 09:54 AM
... Mr. Trump's comments about the tariffs' impact on consumers followed the United States trade representative's office announcement that while the new tariffs would take effect as Mr. Trump had threatened, some notable items would not immediately be subject to them.

Consumer electronics, video game consoles, some toys, computer monitors and some footwear and clothing items were among the items the trade representative's office said would not be hit with tariffs until retailers had time to stockpile what they needed for their busiest time of year.

The administration also said some products were being removed from the tariff list altogether "based on health, safety, national security and other factors." A spokesman for the trade representative's office said the products being excluded from the tariffs included car seats, shipping containers, cranes, certain fish and Bibles and other religious literature.

The S&P 500 climbed nearly 2 percent after the announcement, lifted partly by stocks of retailers and computer chip producers that have been sensitive to indications that trade tensions were getting either better or worse.

Best Buy, which gets a many of the products it sells from China, was among the best-performing stocks in the S&P 500, up more than 8 percent in morning trading. The Nasdaq composite index rose more than 2 percent. ...

[Aug 13, 2019] The United States is openly encouraging a hard or radical split between the United Kingdom and the European Union

Aug 13, 2019 | economistsview.typepad.com

anne -> anne... , August 13, 2019 at 01:38 PM

The United States is openly encouraging a hard or radical split between the United Kingdom and the European Union. This by way of John Bolton. Why the administration would take such a position is a puzzle to me, and the openness is shocking.
anne -> anne... , August 13, 2019 at 01:41 PM
https://news.cgtn.com/news/2019-08-13/U-S-supports-no-deal-Brexit-with-trade-deals-ahead-says-Bolton-J7cM4HEMLK/index.html

August 13, 2019

U.S. supports no-deal Brexit with trade deals ahead, says Bolton

The United States would enthusiastically support a no-deal Brexit if that is what the British government decided to do, U.S. National Security Adviser John Bolton said on Monday during a visit to London aimed at reassuring Britain over UK-U.S. ties.

"If that's the decision of the British government we will support it enthusiastically, and that's what I'm trying to convey. We're with you, we're with you," Bolton told reporters after his first day of meetings.

"They will have to figure out how to do what they can by October 31 or soon thereafter. From our point of view, we would have been happy to do it before that," the official said. "The previous government didn't want to do it, this government does. We're very happy about it," he added.

U.S. President Donald Trump wants to see a successful British exit from the European Union on October 31 and Washington will be ready to work fast on a U.S.-UK free trade agreement, Bolton told British Prime Minister Boris Johnson.

BBC quoted Bolton as saying that a bilateral agreement or "series of agreements" could be carved out "very quickly, very straight-forwardly."

He said British officials had given him an unmistakable sense that they were determined to honor the 2016 referendum vote to leave the EU.

"The fashion in the European Union: When the people vote the wrong way from the way the elites want to go, it's to make the peasants vote again and again until they get it right," Bolton said.

The central message Bolton was delivering is that the United States would help cushion Britain's exit from the EU with a free trade deal that is being negotiated by U.S. Trade Representative Robert Lighthizer and his British counterpart, Liz Truss.

Bolton said Britain and the United States could agree trade deals on a sector-by-sector basis, leaving more difficult areas in the trading relationship until later.

He said the ultimate aim was a comprehensive trade deal, but highlighted that financial services could be one of the more difficult industries to reach an agreement on.

Bolton had been expected to urge officials from Johnson's government to align its policy on Iran more along the lines of the United States, which has pushed a much tougher line against Tehran since withdrawing from world powers' 2015 nuclear agreement with Tehran.

But, after his meetings Bolton said talks on some of these thornier diplomatic issues could wait.

Johnson has told the European Union there is no point in new talks on a withdrawal agreement unless negotiators are willing to drop the Northern Irish backstop agreed by his predecessor Theresa May.

The EU has said it is not prepared to reopen the divorce deal it agreed with May, which includes the backstop, an insurance policy to prevent the return to a hard border between the British province of Northern Ireland and EU-member Ireland.

[Aug 13, 2019] From an economic perspective, when and if UK exists the EU is shrinking from 27 member-states to 9."

Aug 13, 2019 | www.moonofalabama.org

Grieved , Aug 12 2019 5:29 utc | 69

@66 psychohistorian

Good to catch you around these economic matters. The WWIII is actually just being waged by one side, I think. China is the caravan moving on. The fading bark of the dogs is the western end of the deal, I think. But no time to enlarge on this right now, what with Europe having the vapors...

Everybody got economics going on, it seems like, and Europe is no exception. Check out below.

~~

Brexit and the EU

Alastair Crooke has a new piece out, riffing largely on a Pritchard Evans article in the Telegraph, and including a very hot video clip from the heart of German concerns as the UK executes Brexit.

I didn't realize how important the UK is to the EU and how its exit changes everything for Germany. But the EU realpolitik illustrated in this Crooke article and in the 6-minute video clip of the German speech is an entire facet of Brexit I had never seen until now. Check this quote:

Speaking in the German parliament, Alice Weidel, the AfD leader, tore into Chancellor Merkel for her and the Brussels botched handling of Brexit (for which "she, Merkel bears some responsibility"). Weidel pointed out that "the UK is the second biggest economy in Europe – as big as the 19 smallest EU members combined". "From an economic perspective, the EU is shrinking from 27 member-states to 9." [My emphasis]

Crooke and co are saying that the UK departure from the EU changes the entire regime of monetary controls within this economic union. Crucially, the lead is now shifting away from Germany and to the failed economic model of France.

To make the chronic acute, now Trump cares, and the US has a stake in this - who knew? The EU didn't know. It always thought the US was a partner, but maybe not.

If you want to dive straight into the German angst, here's the six-minute video of Alice Weidel ripping German complacency apart with a call to attention from her constituency in marginalized eastern Germany:
German view of Brexit

And for the containing article from Crooke - be warned that he quotes Paul Krugman but I have to say it sounds pretty good to me - here's his article:
Germany Stalls and Europe Craters

[Aug 13, 2019] The Satanic Temple, an organisation masquerading as a Satan-worshipping religion, whose members stage various stunts that expose the hypocrisy of governments and mainstream religious organisations in pushing for greater freedoms and rights for themselves but denying freedom of speech and freedom of religious worship to others, and in the lip service these institutions pay to the separation of religion and the state.

Aug 13, 2019 | www.moonofalabama.org

Jen , Aug 12 2019 10:54 utc | 83

Aye, Myself & Me @ 44:

You should try watching the recent documentary "Hail Satan?" by Penny Lane. It's about the founding and evolution of The Satanic Temple, an organisation masquerading as a Satan-worshipping religion, whose members stage various stunts that expose the hypocrisy of governments and mainstream religious organisations in pushing for greater freedoms and rights for themselves but denying freedom of speech and freedom of religious worship to others, and in the lip service these institutions pay to the separation of religion and the state.

The only disappointing aspect of the documentary is that most of the in-fighting amongst the different chapters of The Satanic Temple was edited out of the film to preserve its flow and emphasise the documentary's main themes. You only get a hint of the differences that developed among the members in how they interpret the organisation's agenda and tenets, and in their attitudes towards working within the system to change it or not working within it but challenging it instead. You do get a sense though that many people around the world must have been waiting for an organisation like TST to come along, that the organisation taps into a deep yearning among people for something or someone to challenge the authorities, and that the organisation grew very quickly, perhaps too quickly for its founder members to get a handle on.

Interestingly, the director became a member of The Satanic Temple after she completed filming and editing the documentary.

[Aug 12, 2019] Bretton Wood is the American version and as usual it was all screwed up, but Keynes original proposals contain policies needed for the EAEU's ability to function

Aug 12, 2019 | www.moonofalabama.org

Formerly T-Bear , Aug 12 2019 21:30 utc | 137

@ karlof1 | Aug 12 2019 20:08 utc | 129

J.M.Keynes addressed 'foreign exchange' between sovereign states in his original version of World Bank and International Money Fund, both addressing the fundamental causes of the Great Depression. These presentations to U.S. government authorities also included the British application for war debt forgiveness at the termination of hostilities to avoid repeating post WWI scenarios. These presentations were then made to the Bretton Woods Conference as the American version of the proposals, reversing institution and purpose as contrived by Washington's design. Makes interesting reading the cables between Keynes and London. What exists since Bretton Wood is the American version and as usual it was all screwed up, but Keynes original proposals contain policies needed for the EAEU's ability to function (and to avoid the economic causes of the Great Depression).

I recalled it was tax collection that became the failure of the colonial confederation, the failure of the Continental Congress to meet its obligations, but then interpretations can vary.

[Aug 12, 2019] The generation that wrote the Treaty of Rome were mostly replaced by the 1980's with a generation not sharing common experiences that the war generation had

Aug 12, 2019 | www.moonofalabama.org

karlof1 , Aug 12 2019 18:23 utc | 115

Grieved @69--

Finally got around to reading Crooke's latest. Yes, the EU's surely in a fix; but IMO, he's correct about the ultimate source of the problem and the inability of solving it without a total reformation. However, I would argue that reforming the EU would be a massive error. IMO, it makes far greater sense to learn from the mistakes and negotiate with Russia and China to consummate Putin's proposal for an EAEU sans the strangulating aspects of an EAEU Central Bank and currency--the Euro and EUCB being two of the EU's mistakes. Such a creation would also see the demise of NATO and the freeing of monies for war to be used on debt relief, infrastructure, and building public/human capital. Russo- and Sinophobia would immediately cease. The issues of South Asia would become easier to handle. And to be included in the club Occupied Palestine would need to become Palestine--one state--thus defusing the last colonial imposition impeding Eurasian integration/unity.

Yes, the five anglophone entities would be left out in the cold, although I can't see The City allowing its politicos to blow its opportunity to cash in by having a piece of the action (but then the British are unpredictable) while Scotland, Ireland and Wales prosper. Africa would see its future lies in joining with Eurasia.

I don't think either Merkel or Macron have the vision required to even imagine the above possibility, although I'd be happy to get surprised. But would such a suggestion need to come from either France or Germany; why not Central and Southern Europe as such a change would really benefit those nations?


Formerly T-Bear , Aug 12 2019 18:59 utc | 122

@ karlof1 | Aug 12 2019 18:23 utc | 115

Don't forget the generation that formed the Treaty of Rome and conducted subsequent negotiations were mostly replaced by the 1980's with a generation not sharing common experiences that the war generation had. Also, by the 1980's the economic theories being taught had substantially changed from the economic understandings and experiences of the war generation.
The war generation had each sovereign country having sufficient and adequate laws governing banking and finance that prevented most aberrations within that country. Each country had developed from differing circumstances and had drafted their laws to those specific circumstances. Finding a common legal denominator proved to be, as they say 'a bridge too far' but as long as each country's laws were effective, no problems presented.
The subsequent generation under the neoliberal economic theories found the central EU government devoid of economic governance or regulatory structures; an open field easily commanded by removing the abilities of each country to provide such governance for their state. Centralisation of economic power became the problem and the cause of problems that remain unaddressed and unless address is done, the economic house of cards will not last for long.

karlof1 , Aug 12 2019 20:08 utc | 129
Formerly T-Bear @122--

Agreed! That's why I made it a point to list the EUCB and Euro as the two main mistakes that must be learned from if an EAEU is to be formulated. Both Russia and China are determined that each nation must remain sovereign, which means each must have control over its monetary and political systems. Instead of a Union implying a federal structure, the proposed political entity would be better termed as a Confederation with each nation retaining its homogeneity. The major difference being the proposed Confederation would have no trade barriers and visa-free movement for its citizens. (Recall the main failing of the initial Confederation of United States were the trade barriers erected between states that prompted the businessmen's revolt that led to the 1787 Constitution and the formation of the federal United States of America.) If a regional grouping of nations--say the former Yugoslavian entities--wanted to reform into a larger political-economic unit to better provide for their collective citizenry, there would be no objection; and the reverse would be possible as sovereignty of people would remain a foundation of human rights.

Given future challenges, IMO the above makes the best sense for Eurasia and Africa. The implosion of the Outlaw US Empire and its affect on its hemispheric neighbors remains unknown. It's possible the once formidable economic magnet of the Empire's economy will reverse its polarity and drive people out as it did during the Great Depression. The vast amount and depth of corruption within the Empire will take several generations to be extinguished, and only then will political reformation become possible.

[Aug 12, 2019] One bright side of our malignant political moment is that you never have to listen to Political Christians again

Aug 12, 2019 | economistsview.typepad.com

EMichael , August 12, 2019 at 12:40 PM

Populists, my a$$.

"One bright side of our malignant political moment is that you never have to listen to Political Christians again. Any moral authority these folks might've claimed prior to becoming the number-one constituency for Donald Trump, American president, is gone. What principles of Jesus Christ does the current president embody? Of course, that question assumes the Son of God's words ever played a particularly prominent role in an Evangelical political movement that for decades has devoted nearly all its energy to opposing marriage equality and getting abortion banned. Matthew 25:35 has never been high on the list of priorities, and Trump -- as he has in so many other areas of our social and political life -- merely laid that truth bare.

Still, it is...something to see a report in Politico outlining what some members of the Evangelical movement found sickening about Trump' recent rally in North Carolina. You know, the one where his fans started chanting, "Send her back!" about a sitting member of Congress who just happened to be a woman of color whom Trump himself had told to go back to where she came from. These Constitutional Conservatives were appalled at the idea of stripping someone of her citizenship because she exercised her First Amendment rights to criticize the country that her constituents had duly elected her to help run. They were gravely offended at the prospect of expelling Ilhan Omar, who came here as a refugee from Somalia as a child, in breach of Christ's edict about inviting in the stranger, the least of my brothers and sisters.

Just kidding! They didn't like the salty language.

'The nation was gripped after the rally by the moment when a "send her back" chant broke out as Trump went after Somali-born Democratic Rep. Ilhan Omar, an American citizen. But some Trump supporters were more fixated on the casual use of the word "goddamn" -- an off-limits term for many Christians -- not to mention the numerous other profanities laced throughout the rest of the speech.

The issue has recently hit a nerve among those who have become some of the president's most reliable supporters: white evangelicals...Coarse language is, of course, far from the president's only behavior that might turn off the religious right. He's been divorced twice, faced constant allegations of extramarital affairs, previously supported abortion rights and has stumbled when trying to discuss the specifics of religion, once saying "two Corinthians" instead of "Second Corinthians." Yet to this point, Trump has maintained broad support from evangelicals, including the unwavering backing of prominent conservative Christian leaders.'

Did tearing children from their parents "hit a nerve"? It appears not, at least among the 73 percent of white Evangelicals who approve of the president's job performance. Neither, as Politico pointed out, does the president's blatant non-religiosity that borders on outright disdain for his religious audiences. After all, "Second Corinthians" doesn't tell the whole story. Here's the line in full: "Two Corinthians, 3:17 -- that's the whole ballgame," he said, adding: "Is that the one you like? I think that's the one you like." It's hard to imagine a more condescending delivery.

The simplest explanation is that the most important part of White Evangelical Christian is "white," and that the movement has always been about maintaining the United States as a country by and for white people. No wonder these folks overlooked Trump's many affairs and divorces and vulgarities. He might have "joked" on television about dating his own daughter, or OK'd calling her a "piece of ass" on the radio, but he's on their side on the truly important things, like federal judge appointments. It's kind of like how no one cares that Trump employs -- and has always employed -- large numbers of undocumented immigrants while railing against illegal immigration. He enforces the racial hierarchy, and that's what matters. It's not really that no one should come. It's that they should be ruthlessly exploited and forced to live in fear as a societal underclass.'

https://www.esquire.com/news-politics/a28675460/donald-trump-evangelicals-goddamn-send-her-back/

[Aug 11, 2019] How much of US China trade imbalance are due to each country's trade policy

Aug 11, 2019 | economistsview.typepad.com

anne , August 10, 2019 at 07:06 AM

https://twitter.com/paulkrugman/status/1160183976771936257

Paul Krugman @paulkrugman

OK, I'm having a very nerdy moment. Trying to understand why US-China bilateral trade imbalance is so large. NOT because it's important, but just because it's kind of a puzzle; I guess it's my inner @Brad_Setser 1/

6:39 AM - 10 Aug 2019

So last year US goods imports from China were $539.5 billion, US goods exports $120.3 billion. That's 4.5 to 1. Why so much asymmetry? I think 4 reasons: Hong Kong, macroeconomics, value-added, and oil 2/

Hong Kong: effectively part of the Chinese economy, and the US runs a large surplus - $37 b in exports, only $6 b in imports. Basically a lot of US goods appear to enter China via HK (something similar in Europe, where US exports to Germany go via Belgium/Netherlands) 3/

Adding HK reduces the export imbalance to "only" 3.5 to 1. Now macro: the US runs overall trade deficit, with imports 1.5 times exports. China runs overall surplus, with imports only 0.8 exports. On some sort of gravity-ish story, this suggests ratio "should" be around 2 4/

Now add China's role as "great assembler", with value-added in exports really coming from elsewhere; famous case of iPhone. Much less true than it used to be, but still means that Chinese surplus is partly optical illusion 5/

Lastly, China imports a lot of oil, which means other things equal needs to run a surplus on everything else. Used to be true of US, but with fracking we're now almost self-sufficient in hydrocarbons (but not exporting to China) This adds a further reason for bilateral 6/

Someone with more time and patience should try to do the full accounting, but I think the US-China bilateral can mainly be explained by "natural causes"; doesn't have much to do with either country's trade policy 7/

RC (Ron) Weakley said in reply to anne... , August 10, 2019 at 07:17 AM
I guess that Krugman is just a natural law kind of guy wherein IP protectionism and arbitrage seeking cross border capital flows in an exorbitantly privileged global reserve currency are just natural phenomenon like meteor showers and rain.
anne -> RC (Ron) Weakley... , August 10, 2019 at 07:17 AM
I tried, but have no idea what this criticism means; whereas I understand Paul Krugman.

[Aug 08, 2019] China Retaliation Is '11' on Scale of 1 to 10, Wall Street Warns

Notable quotes:
"... "While there were measures that could have been chosen with larger direct effects on supply chains, the announcements from Beijing represent a direct shot at the White House and seem designed for maximum political impact," Krueger said. " We expect a quick (and possibly intemperate) response from the White House, and consequently expect a more rapid escalation of trade tensions." ..."
"... In a mid-day note, Krueger added that "the next stop on the currency manipulation road is probably off the map." Krueger expects Trump's "drumbeat on currency" will get louder, with the potential for the president to use a "charge of currency manipulation to justify some combination of (more) tariffs, investment restrictions and export controls." ..."
"... Instructing state-owned Chinese firms to halt U.S. crop purchases triggered "the obligatory flight-to-quality," which pushed 10-year yields to 1.74%, with two-year yields keeping pace. That was "an impressive move that suggests August will not experience the traditional summer doldrums. Who needs vacation anyway?" ..."
"... Bank investors' eyes were "glued to the yield curve last week," with Trump's tariff tweet on Thursday, Graseck wrote in a note. They're now asking about Morgan Stanley's net interest margin (NIM), outlook. ..."
Aug 08, 2019 | economistsview.typepad.com

Fred C. Dobbs , August 05, 2019 at 01:39 PM

China Retaliation Is '11' on Scale of 1 to 10, Wall Street Warns
Bloomberg - Felice Maranz - August 5, 2019

https://www.bloomberg.com/news/articles/2019-08-05/china-retaliation-is-11-on-scale-of-1-to-10-wall-street-warns

Analysts continued to warn about the dangers of an escalating trade war on Monday, as China moved to strike back at the U.S., hitting U.S. stocks and boosting Treasuries.

Semiconductors, with direct exposure to trade, and banks stocks, which are sensitive to interest rates, were among the decliners. The biggest U.S. banks slid, with the KBW Bank Index dropping as much as 4.1% to the lowest since June 4. Bank of America Corp. led index decliners, with a drop of 5.5%, the most since Dec. 4, while Citigroup Inc. shed more than 4% and JPMorgan Chase & Co. slipped 3.8%.

Micron Technology Inc. fell 6.2% while Texas Instruments Inc. lost 4.4% and Intel Corp. was down 4%. Apple Inc. dropped 5.6%, the most since May 13. Shares in Chinese tech giants Alibaba Group Holding and JD.com Inc. fell near two month lows in U.S. Trading.

Agriculture equipment makers Deere & Co. and AGCO Corp. tumbled as China suspended imports of U.S. agricultural products. The escalating trade tensions are also a major risk for the U.S. automotive industry, which has a significant exposure to the country. According to UBS's Global Wealth Management Chief Investment Officer Mark Haefele, the latest spat raises the possibility that "tariffs could also be placed on auto imports."

President Donald Trump tweeted about China and the Fed on Monday morning, saying: "China dropped the price of their currency to an almost a historic low. It's called 'currency manipulation.' Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!"

Here's a sample of some of the latest commentary:

Cowen, Chris Krueger
Krueger called China's retaliation "massive," adding that "on a scale of 1-10, it's an 11." He cited the Chinese government calling on state buyers to halt U.S. agricultural purchases, while there's "increased anecdotal evidence that the Chinese government is tightening its overview of foreign firms."

"While there were measures that could have been chosen with larger direct effects on supply chains, the announcements from Beijing represent a direct shot at the White House and seem designed for maximum political impact," Krueger said. " We expect a quick (and possibly intemperate) response from the White House, and consequently expect a more rapid escalation of trade tensions."

"There now will be increased expectations that the Fed will cut again in September to offset the drag caused by this escalation in the trade war," he added. "Such moves will only be a partial, lagged offset to the recessionary headwinds a cycle of retaliation would cause."

In a mid-day note, Krueger added that "the next stop on the currency manipulation road is probably off the map." Krueger expects Trump's "drumbeat on currency" will get louder, with the potential for the president to use a "charge of currency manipulation to justify some combination of (more) tariffs, investment restrictions and export controls."

BMO, Ian Lyngen
"The wait is over for those wondering how Beijing would respond to Trump's recent tariff announcement," BMO said. "The result: the yuan was allowed to depreciate well beyond 7.0."

Instructing state-owned Chinese firms to halt U.S. crop purchases triggered "the obligatory flight-to-quality," which pushed 10-year yields to 1.74%, with two-year yields keeping pace. That was "an impressive move that suggests August will not experience the traditional summer doldrums. Who needs vacation anyway?"

"The most significant unknown at this moment," Lyngen added, "is how much further the yuan will be allowed to fall given that it's already the weakest since 2008."

Morgan Stanley, Betsy Graseck (bank analyst)

Bank investors' eyes were "glued to the yield curve last week," with Trump's tariff tweet on Thursday, Graseck wrote in a note. They're now asking about Morgan Stanley's net interest margin (NIM), outlook.

Graseck didn't change her NIM assumptions -- yet. "We bake one additional cut of 25 basis points in 2019 in-line with our economist, and bake in the 10-year at 1.75% by mid 2020," she wrote. She'll update NIM and earnings per share estimates "if it looks like these trade tariffs are going through as September approaches."

Morgan Stanley, Michael Zezas (policy strategist)

"The dynamics of U.S.-China negotiation and macro conditions mean the next round of tariffs will likely be enacted, and investors are likely to behave as if further escalation will follow in 2019 until markets price in impacts," Zezas wrote. "This supports our core view of weaker growth and skews the Fed dovish."

Zezas sees incentives for the U.S. to escalate quickly. If the administration "understands the Fed's trade policy reaction function, then it may also perceive that a more rapid escalation could deliver one or more of three beneficial points ahead of the 2020 election: 1) A quicker, potentially more aggressive Fed stimulus response that could help the economy heading into the election; 2) More time to re-frame the potential economic downside; and 3) A major concession by China (not our base case, but it is, of course, a possibility)."

Veda, Henrietta Treyz

"The U.S. and China are moving into one of their most aggressive phases yet in the year-plus long trade war and we fully expect things to escalate from here," Treyz wrote in a note.

Treyz added that China's ability to quickly adjust their currency is an advantage they have over the U.S. that "goes to the heart of the issue for the Trump administration." The administration may view China's communist regime as a "systemic advantage" versus "free markets and democracy" in the U.S., as the Chinese can "subsidize domestic industry, quickly, enact lower tax rates and provide stimulus."

Furthermore, her conversations with Republicans point to the belief that "China's economy is on the brink of collapse," she said, with turmoil in Hong Kong "considered evidence of an organic domestic uprising that many believe the Chinese government cannot contain."

Republicans may also believe Trump will "galvanize" his base behind him, while attracting "anti-trade and union Democrats in the Rust Belt as he takes on the mantle of a war time president going into 2020 by engaging in this trade war." ...

[Aug 08, 2019] There's a revealing puzzle in the China tariffs

Aug 08, 2019 | economistsview.typepad.com

anne , August 06, 2019 at 12:26 PM

http://larrysummers.com/2019/05/15/theres-a-revealing-puzzle-in-the-china-tariffs/

May 15, 2019

There's a revealing puzzle in the China tariffs

On Monday, China announced new tariffs on $60 billion of U.S. exports, and the United States threatened new tariffs on up to $300 billion of Chinese goods. These actions were cited as the principle reason for a decline of more than 600 points in the Dow Jones industrial average, or about 2.4 percent in broader measures of the stock market. With the total value of U.S. stocks around $30 trillion, this decline represents more than $700 billion in lost wealth.

This was not an isolated event. Again and again in the past year, markets have gyrated in response to the state of trade negotiations between the United States and China.

The market sensitivity to threats and counter-threats in the trade war is quite remarkable. Monday's announcement by the Chinese, for example, would be expected to raise China's tariffs by about $10 billion. Much of this will show up as higher prices for Chinese importers, and some of it will be avoided by diverting exports of goods such as liquid natural gas to other markets, so the impact on U.S. corporate profits will be far less than $10 billion. Meanwhile, U.S. tariffs are likely to raise corporate profits as higher import costs push some business to domestic producers.

There is the further consideration that reasonable market participants should not have entirely discounted the possibility of tariff increases Monday and that there surely remains some chance a trade deal will be reached. So, in fact, the market should not even have moved in full proportion to the change in corporate profitability associated with new tariffs.

There is a revealing puzzle here. Events whose direct impact on corporate profits is a few billion dollars seem to be driving market fluctuations that change the total value of corporations by hundreds of billions of dollars. To be sure, there would be many ways of refining my calculation of the profit impact to recognize various feedbacks, and certainly the imposition of tariffs increases uncertainty, which in general depresses markets. But with any plausible calculation of the direct impact of tariff changes on profitability or uncertainty about profitability, it is not possible to justify the kinds of changes in market value we observed Monday or on many other days when there was news about the status of the U.S.-China trade negotiations.

Part of the answer to the puzzle, I suspect, lies in markets' tendency to sometimes overreact to news, especially in areas where they do not have long experience. This idea is supported by the tendency illustrated by the market's Tuesday rally, which took place without any particularly encouraging U.S.-China developments.

A larger part of the answer probably lies in the idea that the current trade conflict is a possible prelude to a far larger conflict between the two nations with the largest economies and greatest power for as far as can be foreseen. When it appears less likely that a conflict over well-defined and ultimately not-that-difficult commercial issues can be resolved, rational observers conclude that it is also less likely the United States and China can manage issues ranging from 5G wireless technology to North Korea, from the future of Taiwan to global climate change, and from the management of globalization to the security architecture of the Pacific region.

A world where relations between the United States and China are largely conflictual could involve a breakdown of global supply chains, a splinternet (as separate, noninteroperable internets compete around the world), greatly increased defense expenditures and conceivably even military conflict. All of this would be catastrophic for living standards and would also have huge adverse effects on the value of global companies.

It is, I suspect, the greater risk of catastrophic medium-run outcomes, rather than the proximate impact of trade conflicts, that is driving the outsize market reactions to trade negotiation news.

This carries with it an important lesson for both sides: It is risky to turn the pursuit of even vital national objectives into an existential crusade. Rather, even when nations have objectives that are in conflict, it is important to seek compromise, to avoid inflammatory rhetoric and to confine rather than enlarge the areas where demands are being made. Establishing credibility that promises will be kept and surprises will be avoided is as or more important with adversaries as with friends.

As the Trump administration carries on the trade negotiations, and as the presidential campaign heats up, Americans will do well to remember that there is no greater threat to the success of our national enterprise over the next quarter-century than mismanagement of the relationship with China. It is not just possible but essential to be strong and resolute without being imprudent and provocative.

-- Larry Summers

anne -> anne... , August 06, 2019 at 12:29 PM
Correcting date:

May 15, 2019

[Aug 08, 2019] White House To Unveil Rule Banning Agencies From Doing Business With Huawei

Aug 08, 2019 | www.zerohedge.com

As has long been expected, the White House is preparing to release a new rule on Wednesday barring government agencies from buying equipment or doing any kind of business with Chinese telecoms giant Huawei - ratcheting up tensions between the world's two largest economies at an already precarious time for the global economy.

Here's more from CNBC :

The Trump administration is expected to release a rule Wednesday afternoon that bans agencies from directly purchasing telecom, video surveillance equipment or services from Huawei. The prohibition was mandated by Congress as part of a broader defense bill signed into law last year.

"The administration has a strong commitment to defending our nation from foreign adversaries, and will fully comply with Congress on the implementation of the prohibition of Chinese telecom and video surveillance equipment, including Huawei equipment," said Jacob Wood, a spokesman for the Office of Management and Budget.

Per CNBC, the new rule is expected to take effect a week from Wednesday, and it applies not only to Huawei, but also to a list of other telecom companies that have drawn security concerns, such as ZTE and Hikvision.

The official said contractors will be able to seek waivers from individual federal agencies if they believe their business with any of the targeted companies should be exempt from the rule.

Moreover, the new rule will also set a deadline of August 2020 for a broader ban on federal contractors doing business with Huawei and other firms.

The law passed by Congress is separate from the Trump Administration's own efforts to keep Huawei in check.

The Commerce Department instigated the tensions between the US and China after it placed Huawei on a blacklist that effectively bans the company from buying goods or doing any kind of business with Huawei. A 90-day grace period that kept Huawei off the blacklist temporarily is now almost over. And President Trump has apparently walked back his promised, made at the G-20 Summit in Osaka, to ease the pressure on Huawei.

However, US chipmakers and tech firms can request waivers, and the CEOs of Google, Qualcomm, Micron, Intel and others met with President Donald Trump at the White House last month and urged the administration to issue those decisions quickly.

In an interview on CNBC, Huawei CSO Andy Purdy defended the company's track record, arguing that European leaders in the UK and Germany had told their counterparts in the US that they had found no evidence that Huawei was a security threat.

"We have tested the products of all vendors to international standards so that there's trust through verification," Purdy said.

But that likely won't change anybody's mind.


TheRapture , 9 hours ago link

Expect a new rule from China:

All Chinese government agencies will be prohibited from buying CISCO and other American telecommunications products. Furthermore, contractors dealing with Chinese government agencies will also be so prohibited from buying American telecom products.

America - population 329 million. Economic growth rate: 2.8%
China - population 1.4 billion. Economic growth rate: 6.5%
source: Wikipedia

China is rapidly industrializing, and has the largest manufacturing base in the world. The USA is already a mature industrial economy, and since NAFTA has offshored most of its manufacturing base. The USA leads the world in the design, manufacture and export of weapons, but relies on coercive political relationships (such as NATO) rather than the "free market" to sell its overpriced and line of products to captive satellite countries. China is rapidly expanding in the weapons manufacturing sphere, as is Russia, and offer increasingly competitive products at lower prices, and with fewer political strings attached.

Something to think about before breastbeating and cheering ourselves on.

CashMcCall , 10 hours ago link

Trump is getting the **** kicked out of him on CNBC and every Financial media on the internet. When China dug in, that was the end of the Trump bluff. For the first time, the absurd articles about China losing are gone and now the new reality is that China is going to squeeze the life out of Trump.

Huawei is just another of Trump's wayward policies of getting Canadian poodles to kidnap Huawei's founder's daughter. Nice dirty **** Trump. Women already hate Trump this ices that cake.

Last week Huawei overtook Apple as the second largest smart phone maker. Huawei announced it no longer had any dependence on US manufacturers for 5G, another body blow to the blowhard.

Dozens of certifying agencies have no studied Huawei products and have found zero instances of spyware or any instance of this hardware being used for spying. In short, Trump and the NSA and CIA look like a bunch of assholes. This will only accelerate Huawei's 5G rollout.

Trump is being **** canned in every direction. The great part of Trump von hitler's personality is that he knows his 10% Sept Tariffs were essentially the end of his presidency, but is too arrogant to reverse course. Instead, he is screaming at the Fed for more loose money to support his bad policies. And he wants more Farmer WELFARE. That dog don't hunt!

China is not going to roll over over for Trump. The financial media is now tearing Trump a new ******* every hour. Markets are not responding to Trump plunge team efforts. They continue to sell off.

Where's the endgame they ask? This is the same deal as Trump closing down the gov for nothing. Trumptards cheered as the orange idiot painted himself in the corner and accomplished nothing. Not one inch of wall has been constructed since Trump took office. Trump floats on a raft of ********. Meanwhile Trump has a 20 year history of hiring Illegals for Trump Organization. Total Fraud and self dealer.

The GOP is now climbing the walls. Today Trump Screamed at the Fed to reduce rates emergently and then said it had nothing to do with China. Astonishing.

When China put an end to US Ag purchases effective immediately they were basically saying they were tired of Trump's ********. The farmer associations are turning on Trump round the clock. Where is Trump? He's hiding out. But of course this has NOTHING to do with China.

But here is Trump once again playing the phony national Security card with Huawei when a dozen independent organizations have published reports and cleared Huawei of the Trump Administration's phony security claims.

vincenze , 11 hours ago link

Huawei Honor smartphones and tablets are really good. The top models are even better than iPhones.

There were some Chinese smartphones at Best Buy the last time I checked.

But I just bought the 128Gb Lenovo Zuk for $280 from Banggoog a couple years ago when it was on sale. It's a little problematic to update Android, but it works perfectly anyway. There is a forum for Lenovo phones, though, with all answers.

There is no need to buy from Best Buy or Amazon, buy cheaper directly from China.
https://www.banggood.com/Wholesale-Smartphones-c-1567.html

me or you , 11 hours ago link

Back into reality.: Huawei to invest Ł1.2bn in new Shanghai R&D Centre, Build 'Self-Reliance' Amid US Trade War on

Tachyon5321 , 11 hours ago link

Poland's state security agency arrested Huawei sales director Wang Weijing and a Polish national over spying.

Dongfan Chung The 74-year-old former Boeing Co. engineer was convicted in July of six counts of economic espionage and other federal charges for keeping 300,000 pages of sensitive papers in his home

Chi Mak He copied and sent sensitive documents on U.S. Navy ships, submarines and weapons to China by courier.

Don't waste my time. A 20 second google search shows you have no point, but the one on the top of your head.

Thus, Given the Chinese government's record on espionage, "a good-faith assertion from Andy is not enough."

Asoka_The_Great , 12 hours ago link

Trumptard and the US Dark State's campaign to KILL Huawei has failed spectacularly.

Huawei reported revenue growth of 23% in the first half of 2019.

https://www.huawei.com/en/press-events/news/2019/7/huawei-announces-h1-2019-revenue

"In Huawei's carrier business , H1 sales revenue reached CNY146.5 billion, with steady growth in production and shipment of equipment for wireless networks, optical transmission, data communications, IT, and related product domains. To date, Huawei has secured 50 commercial 5G contracts and has shipped more than 150,000 base stations to markets around the world.

In Huawei's enterprise business , H1 sales revenue was CNY31.6 billion. Huawei continues to enhance its ICT portfolio across multiple domains, including cloud, artificial intelligence, campus networks, data centers, Internet of Things, and intelligent computing. It remains a trusted supplier for government and utility customers, as well as customers in commercial sectors like finance, transportation, energy, and automobile.

In Huawei's consumer business , H1 sales revenue hit CNY220.8 billion. Huawei's smartphone shipments (including Honor phones) reached 118 million units, up 24% YoY . The company also saw rapid growth in its shipments of tablets, PCs, and wearables. Huawei is beginning to scale its device ecosystem to deliver a more seamless intelligent experience across all major user scenarios. To date, the Huawei Mobile Services ecosystem has more than 800,000 registered developers, and 500 million users worldwide.

"Revenue grew fast up through May," said Liang. "Given the foundation we laid in the first half of the year, we continue to see growth even after we were added to the entity list. That's not to say we don't have difficulties ahead. We do, and they may affect the pace of our growth in the short term."

He added, "But we will stay the course. We are fully confident in what the future holds, and we will continue investing as planned – including a total of CNY120 billion in R&D this year. We'll get through these challenges, and we're confident that Huawei will enter a new stage of growth after the worst of this is behind us."

[1

Tachyon5321 , 11 hours ago link

Just more proof that Huawei is selling into the USA at below cost. A massive drop in American sales improved the razor thin profit of the company...

Asoka_The_Great , 11 hours ago link

"Just more proof that Huawei is selling into the USA at below cost. "

WHAT A DUMB ****!

HUAWEI HAS NO MARKETSHARE IN US.

Huawei Networking Equipments was banned in US, years ago. None of three major US cellular networks use Huawei's equipment or sell its smartphones.

Tachyon5321 , 4 hours ago link

WHAT A DUMB ****!: Thanks!!! That makes me 3 times smarter than you because Huawei subcontractors do sell Huawei products in the USA. You are an ignorant Asian that should go back to his village and the one room dirt floor hut... LOL

Edit: 8% margins....LOL

Everybodys All American , 12 hours ago link

I'd be the first to say that I don't know everything about this telecom but I will say this seems like a reasonable decision on it's face for the US government not to put in Chinese telecommunications equipment. Of course China is going to not like it because with Hillary she just gave them direct access to damn near anything through her email server.

Archeofuturist , 12 hours ago link

Exactly. Every penny .gov spends should mandated that it MUST be from America companies. Every nut, every bolt.

[Aug 06, 2019] Pretty glum outlook on US China trade war

Aug 06, 2019 | www.moonofalabama.org

Passer by , Aug 5 2019 22:48 utc | 61

b, the trade war is escalating, For The First Time In 25 Years, US Treasury Just Designated China A Currency Manipulator.

Can you make an article on the situation?

karlof1 , Aug 6 2019 0:26 utc | 65

Passer by @61--

First, Trump coerced the Fed into lowering interest rates which made US Dollars cheaper to buy then he increased domestic taxation 10% though increasing the tariff on selected Chinese goods. China then blocks the importation of all US foodstuffs and lowers the price of the Yuan an amount equal to the tariff increase--and the US treasury and Trump have the gall to call China the currency manipulator! NO, as usual with the Outlaw US Empire, it's accusations are psychological projection of what itself does. Hudson discusses it here . US financial markets have finally awakened to Trump's moves and have fallen 5% over the last three trading days, with more likely to follow. Hudson on Trump:

"It's all a diversion so that people won't look at what's really happening, only at what Trump is saying. But as people find that they have to pay higher prices, I don't think they'll believe Trump. I think he's lost all credibility. That's why the stock market's collapsing. They're aghast. They think that even Trump can't get away with this big a lie when it's so obviously false."

As I commented last Friday on the AP article my local paper ran about the tariff hike, it finally told the truth about who'll pay--US Consumers or China: US Consumers! AP, All Propaganda, tore a gapping hole into Trump's narrative--but will people believe a media outlet that's lied so often?

Trump can't win his global trade war. China won't capitulate; it's economy and society are 100x healthier than the Outlaw US Empire's and are resilient where the USA can only claim to have been once upon a time. Why that is has been explained before. The transcript of this interview's poor, but the topic covers the answer by showing how Canada's economy became a victim of the same predators as the USA's.

We know what happened, how and why. What we don't know how to do is reverse the situation politically. Hudson compares the dire situation to that of Rome:

"So they obviously, the left-wingers such as Bernie Sanders, want to run for president as a kind of educational campaign to make their policy clear to the people, but they know that there's no way in which the ruling class will let them win.

"It's been very clear, if they did win, they would be assassinated very quickly. I've been told that by presidential candidates. The threat is, you'll never be president, we have ways of keeping you out, and should you succeed, we will do to you what the Romans did to every advocate of democracy century after century, assassination."

It seems the best those of us residing within the Outlaw US Empire can hope for is that Trump's policies will decimate US financial institutions worse than what occurred in 2008. Hudson's perspective:

"I don't see any popular movement yet. You can very easily see why collapse is inevitable....

"There's no way of knowing when there will be a break in the chain of payment. Usually it's a bankruptcy of a big company, very often by fraud, as the 2008 crisis was bank mortgage fraud. You don't know when people will fight back. Often, surprisingly, they only fight back when things are getting better. But things still have a way to go to get much worse in Canada, much worse in the United States, so I don't see any possibility of reform within the next 4 to 8 years."

Pretty glum outlook.

[Aug 05, 2019] Impulsive and aggreesive President: not a good combination

Aug 05, 2019 | www.moonofalabama.org

Passer by , Aug 4 2019 23:56 utc | 56

Trump Overruled All Advisors Except Navarro "In Heated Exchange" Before Launching New China Tariffs

https://www.zerohedge.com/news/2019-08-04/trump-overruled-all-advisors-except-navarro-launching-new-china-tariffs

So much for Trump being a "moderate" and "not a hawk".

In my assessment Trump is very aggressive President foreign policy wise. Way more aggressive than Obama.

[Aug 04, 2019] Bank of America What Trump Did Is A Game Changer

Price of clothing is already noticeably higher with some categories (shooes) affected more then others.
Aug 04, 2019 | www.zerohedge.com

However, all that is about to change, because as Bank of America team of economists writes, Trump's latest tariff announcement from last Thursday, when the president shockingly unveiled 10% tariffs on $300BN in Chinese imports starting September 1, "is a major escalation." The reason for this is that past measures had mostly avoided consumer goods. By contrast, the threatened tariffs would cover $120bn of consumer goods, out of $300bn in total, and since BofA expects the tariffs to be implemented, either on schedule or later this year, the period of dormant trade war inflation is about to end with a bang, not a whimper.

... ... ...

Was Trump's announcement a negotiating tactic?

For the past year, one of the points of biggest contention among economists and traders is that despite what is now a 1+ year trade war with China, inflation due to higher tariffs has been strangely missing, with some claiming that the goods targeted in previous tariff rounds were either not "consumer" enough, or simply had more affordable substitutes from other, non-Chinese supply chains, allowing US consumer to avoid having higher prices passed upon them.

However, all that is about to change, because as Bank of America team of economists writes, Trump's latest tariff announcement from last Thursday, when the president shockingly unveiled 10% tariffs on $300BN in Chinese imports starting September 1, "is a major escalation." The reason for this is that past measures had mostly avoided consumer goods. By contrast, the threatened tariffs would cover $120bn of consumer goods, out of $300bn in total, and since BofA expects the tariffs to be implemented, either on schedule or later this year, the period of dormant trade war inflation is about to end with a bang, not a whimper.

bitzager , 7 minutes ago link

"Game Changer" - What's in your wallet? We'll soon find out in

the Walmart near you.. :)))

2banana , 13 minutes ago link

Well, a silly "feedback loop" as for the first three years of Trump being elected - the Fed RAISED rates eight (8) times.

In the face of all the tariffs during that time period and a trade war with China.

Also - the Fed started the Great QE unwind in the same time period - "withdrawing" $700 billion from circulation.

[Aug 04, 2019] Commentary China will never buckle under Washington's old trick of trade bullying

Notable quotes:
"... As the U.S. administration is ready to impose a 10 percent tariff on the remaining 300 billion U.S. dollars of Chinese imports, its sincerity in reaching a mutually beneficial trade deal with Beijing that can accommodate each other's major concerns has gone bust. It seems that in the eyes of Washington's China hawks, trade talks are no more than a formality with which to rip China off. ..."
"... While the White House is boasting about taxing China until a trade deal is reached, it should keep in mind that China will only accept a win-win agreement on the basis of mutual respect and equal treatment. ..."
"... Beijing's position has been consistent and clear: China does not want a trade war, but it is not afraid of one and will fight one if necessary. ..."
"... It is therefore hoped that Washington should drop its fantasy to bring Beijing down to its knees with its same and old tricks of maximun pressure. If it truly wants a deal, then they will need to show some real sincerity first. ..."
Aug 02, 2019 | www.xinhuanet.com

Despite calling the just-concluded China-U.S. trade talks in Shanghai "constructive" and hoping for more "positive dialogue," the White House on Thursday announced plans to impose extra tariffs on Chinese imports from Sept. 1.

Washington's unilateral escalation of trade disputes is a serious breach of trust after the two sides reached in June consensus to restart trade talks on the basis of equality and mutual respect.

Apart from undermining the momentum of the newly resumed China-U.S. trade talks, the U.S. flip-flopping again exemplifies Washington's untrustworthiness in striking a deal and its disturbing propensity for bullying.

The U.S. administration should bear in mind that its bullying and tariff threat, which has not worked in the past, will not work this time.

For over a year, the U.S.-initiated trade disputes with China have bogged down not just economic growth of the two countries but that of the whole world. Meanwhile, an increasingly capricious Washington is harming the current world order with more uncertainties.

As the U.S. administration is ready to impose a 10 percent tariff on the remaining 300 billion U.S. dollars of Chinese imports, its sincerity in reaching a mutually beneficial trade deal with Beijing that can accommodate each other's major concerns has gone bust. It seems that in the eyes of Washington's China hawks, trade talks are no more than a formality with which to rip China off.

Also, the new twist in China-U.S. trade talks shows that some Washington politicians are trying to play tough against China on trade matters and gain cheap political points as the new cycle of U.S. presidential election is looming.

Unlike previous rounds of taxing Chinese imports, the U.S. administration this time is targeting a wide swath of consumer goods, and therefore, is "using American families as a hostage" in its trade negotiations, according to Matt Priest, president of the Footwear Distributors and Retailers of America.

While the White House is boasting about taxing China until a trade deal is reached, it should keep in mind that China will only accept a win-win agreement on the basis of mutual respect and equal treatment.

Beijing's position has been consistent and clear: China does not want a trade war, but it is not afraid of one and will fight one if necessary.

In response to Washington's tariff assaults since March 2018, China has had to take forceful counter measures. This instance will be no exception.

Still, Beijing remains committed to handling its trade problems with Washington as long as the settlement is based on mutual respect and equality, and conform to China's core interests. China, which still sees a steady economic growth and boasts enormous potential for further development, will always find a way to withstand any pressure if there no deal is reached.

It is therefore hoped that Washington should drop its fantasy to bring Beijing down to its knees with its same and old tricks of maximun pressure. If it truly wants a deal, then they will need to show some real sincerity first.

[Aug 03, 2019] The US elite realised that globalization no longer serves the US as it leads to the rise of developing nations. Thus they no longer support it and even sabotage it.

Notable quotes:
"... US President Trump does not do that in order to dismantle the dollar or US hegemony because of so called isolationism, as some may think. Trump does that in order to save US hegemony, implementing policies, in my opinion, devised by the US military/intelligence/science community. They now want to hamper globalisation and create fortress US, in order to bring back manufacturing and save as much as possible of the US Empire. Chaos and lack of cooperation in the world benefit the US. They now realise globalisation no longer serves the US as it leads to the rise of developing nations. Thus they no longer support it and even sabotage it." ..."
"... Trump and his trade negotiators continue to insist on China agreeing to an unequal trade treaty. ..."
"... IMO, China can continue to refuse and stand up for its principles, while the world looks on and nods its head in agreement with China as revealed by the increasing desire of nations to become a BRI partner. ..."
"... It should be noted that Trump's approach while differing from the one pushed by Obama/Kerry/Clinton the goal is the same since the Empire needs the infusion of loot from China to keep its financial dollarized Ponzi Scheme functioning. ..."
"... Russia's a target too, but most of its available loot was already grabbed during the 1990s. ..."
"... I keep going back to believing that multilateralism is a code word for no longer allowing empire global private finance hegemony and fiat money. ..."
"... The continuing practice of Neoliberalism by the Outlaw US Empire and its associated corporations and vassal nations checkmates what you think Trump's trying to accomplish. Hudson has explained it all very well in a series of recent papers and interviews: Neoliberalism is all about growing Financial Capitalism and using it to exert control/hegemony on all aspects of political-economy. ..."
"... Trump hasn't proposed any new policy to accomplish his MAGA pledge other than engaging in economic warfare with most other nations. His is a Unilateral Pirate Ship out to plunder all and sundry, including those that elected him. ..."
Aug 03, 2019 | www.moonofalabama.org

Passer by | Aug 2 2019 23:39 utc | 30

I will mention this again, to see what people here think, as they are intelligent people. I sent mails to Russian and Chinese authorities about this.

"I will provide you with possible reasons behind the current trade wars and rejection of globalisation by the US. In short, they think that they will save their hegemony, to a certain degree, that way.

There are long term GDP Growth and Socioeconomic Scenarios developed by the Intergovernmental Panel on Climate Change, the OECD, and the world scientific community. They are generally used to measure the impact of Climate change on the World. In order to measure it, Socioeconomic Scenarios were developed, as the level of economic growth in the world is very important for determining the impact of Climate Change in the future. High growth levels will obviously affect Climate Change, so these GDP estimates are important. The scenarios are with time horizon 2100.

For more on this you can check these studies here, some of the many dealing with this topic. They describe the scenarios for the world.

https://www.sciencedirect.com/science/article/pii/S0959378016300681#sec0025

https://www.sciencedirect.com/science/article/abs/pii/S0959378015000837

There are 5 main scenarios, or "Shared Socioeconomic Pathways". All of them describe different worlds.

See SSP 3. A world of rivalry, trade wars, trade barriers, lack of global cooperation, and fragmentation, will lead to lower level of growth in the developing world, and thus a slow catch up process. Multipolarity in such a world is weak as the developing world is hampered.

In other words, a world of cooperation between countries will lead to higher economic growth in the developing world, faster catch up process, and thus stronger multipolarity.

Low cooperation, fragmented world, high conflict scenarios consistently lead to low growth in the developing world and thus to the US and the West retaining some of its positions - a world with overall bad economy and low level of multipolarity.

Basically, globalisation is key. The developing world (ex West) was growing slowly before globalisation (before 1990). Globalisation means sharing of technology and knowledge, and companies investing in poorer countries. Outsourcing of western manufacturing. Etc. After globalisation started in 1990, the developing world is growing very well. It is globalisation that is weakening the relative power of the West and empowering the developing world. The US now needs to kill globalisation if it is to stop its relative decline.

So what do we see: exactly attempts to create the SSP 3 scenario. Trade wars, sanctions, attacks on multilateral institutions - the WTO, on international law, on the Paris Climate Change Agreement (which if accepted would put constraints on the US economy), on the UN, bullying of Europe, lack of care for european energy needs, support for Brexit (which weakens Europe), crack down on chinese students and scientists in the US, crack down on chinese access to western science data, demands to remove the perks for poor countries in the WTO, etc. This is hitting economic growth in the whole world and the global economy currently is not well. By destroying the world economy, the US benefits as it hampers the rise of the developing nations.

US President Trump does not do that in order to dismantle the dollar or US hegemony because of so called isolationism, as some may think. Trump does that in order to save US hegemony, implementing policies, in my opinion, devised by the US military/intelligence/science community. They now want to hamper globalisation and create fortress US, in order to bring back manufacturing and save as much as possible of the US Empire. Chaos and lack of cooperation in the world benefit the US. They now realise globalisation no longer serves the US as it leads to the rise of developing nations. Thus they no longer support it and even sabotage it."

karlof1 , Aug 2 2019 23:55 utc | 31

psychohistorian @11--

You ask, "The concept of multilateralism is not completely clear to me in relation to the global public/private finance issue and I am not of faith but of questions...."

Wikileaks definition :

"In international relations, multilateralism refers to an alliance of multiple countries pursuing a common goal."

The key point for the Chinese during negotiations as I understand them via their published White Paper on the subject is development and the international rules put in place at WTO for nations placed into the Developing category, which get some preferential treatment to help their economies mature. As China often reminds the global public--and officials of the Outlaw US Empire--both the BRI and EAEU projects are about developing the economies of developing economies, that the process is designed to be a Win-Win for all the developing economies involved. This of course differs vastly from what's known as the Washington Consensus, where all developing economies kowtow to the Outlaw US Empire's diktat via the World Bank and IMF and thus become enslaved by dollar dependency/debt. Much is written about the true nature of the Washington Consensus, Perkins Confessions of an Economic Hit Man and Klein's Disaster Capitalism being two of the more recent and devastating, and many nations are able to attest to the Zero-sum results. The result is very few nations are willing to subject their economies to the pillaging via Washington Consensus institutions, which Hudson just recently reviewed.

The Empire is desperate and is looking for ways to keep its Super Imperialism intact and thus continue its policy aimed at Full Spectrum Dominance. But the Empire's abuse of the dollar-centric institutions of international commerce has only served to alienate its users who are openly and actively seeking to form parallel institutions under genuine multilateral control. However as Hudson illustrates, Trump doesn't know what he's doing regarding his trade and international monetary policies. Today's AP above the fold headline in Eugene's The Register Guard screamed "Trump threatens 10% tariffs;" but unusually for such stories, it explains that the 10% is essentially a tax on US consumers, not on Chinese companies, which provides a message opposite of the one Trump wants to impart--that he's being tough on the Chinese when the opposite's true. China will continue to resist the attempts to allow the international financial sharks to swim in Chinese waters as China is well aware of what they'll attempt to accomplish--and it's far easier to keep them out than to get them out once allowed in, although China's anti-corruption laws ought to scare the hell out of the CEOs of those corps.

The Empire wants to continue its longstanding Open Door policy in the realm of target nations opening their economies to the full force of Imperial-based corps so they can use their financial might to wrestle the market from domestic players and institute their Oligopoly. China already experienced the initial Open Door (which was aimed at getting Uncle Sam's share of China during the Unequal Treaties period 115 years ago) and will not allow that to recur. China invokes its right under WTO rules for developing economies to protect their financial services sector from predation; the Empire argues China is beyond a developing economy and must drop its shields. We've read what Hudson advised the Chinese to do--resist and develop a publicly-based yuan-centered financial system that highly taxes privatized rent-seekers while keeping and enhancing state-provided insurance--health, home, auto, life, etc--while keeping restrictions on foreign land ownership since it's jot allowed to purchase similar assets within the domestic US market.

The Outlaw US Empire insists that China give so it can take. Understandably, China says no; what we allow you to do, you should allow us to do. Trump and his trade negotiators continue to insist on China agreeing to an unequal trade treaty. Obviously, the latest proposal was merely a repetition of what came before and was rejected as soon as the meeting got underway, so it ended as quickly as it started. IMO, China can continue to refuse and stand up for its principles, while the world looks on and nods its head in agreement with China as revealed by the increasing desire of nations to become a BRI partner.

It should be noted that Trump's approach while differing from the one pushed by Obama/Kerry/Clinton the goal is the same since the Empire needs the infusion of loot from China to keep its financial dollarized Ponzi Scheme functioning.

Russia's a target too, but most of its available loot was already grabbed during the 1990s. D-Party Establishment candidates have yet to let it be known they'll try to do what Trump's failing to do, which of course has nothing to do with aiding the US consumer and everything to do with bolstering Wall Street's Ponzi Scheme.

Passer by | Aug 3 2019 0:06 utc | 32

karlof1 , Aug 2 2019 23:55 utc | 31

Good comment, karlof1 , i think that the attack against China is attack against the heart of multipolarity. It will be good if b could post about the escalation of the trade war. This is important. The US clearly intends to resist multipoarity, and tries to stop it.

karlof1 , Aug 3 2019 0:19 utc | 34
@ karlof1 with the response...thanks

If I would have had my act together last night I would have posted another link fro Xinhuanet (can't find now) about how China wants to retain developing nation status and provides as data that the (I think) per capita GDP had gone down....gotten worse in relation to the US per capita GDP.

I keep going back to believing that multilateralism is a code word for no longer allowing empire global private finance hegemony and fiat money.

Passer by @30--

The continuing practice of Neoliberalism by the Outlaw US Empire and its associated corporations and vassal nations checkmates what you think Trump's trying to accomplish. Hudson has explained it all very well in a series of recent papers and interviews: Neoliberalism is all about growing Financial Capitalism and using it to exert control/hegemony on all aspects of political-economy.

Thus, there's no need to sponsor the reindustrialization that would lead to MAGA. Indeed, Trump hasn't proposed any new policy to accomplish his MAGA pledge other than engaging in economic warfare with most other nations. His is a Unilateral Pirate Ship out to plunder all and sundry, including those that elected him.

In your outline, it's very easy to see why BRI is so attractive to other nations as it forwards SSP1. Awhile ago during a discussion of China's development goals, I posted links to its program that's very ambitious and doing very well with its implementation, the main introduction portal being here .

William Gruff , Aug 3 2019 0:28 utc | 35
psychohistorian @11 asked: "The concept of multilateralism is not completely clear to me in relation to the global public/private finance issue and I am not of faith but of questions...."

karlof1 @31 covered it pretty well I think, but I want to try to answer in just a couple sentences (unusual for me).

Global private finance is driven by one thing and one thing only: making maximum profits for the owners quarter by financial quarter. Global public finance is driven by the agendas of the nations with the public finance, with profits being a secondary or lesser issue.

This boils down to private finance being forever slave to the mindless whims of "The Market™" (hallowed be Its name), while public finance is, by its nature, something that is planned and deliberated. Nobody can guess where "The Market™" (hallowed be Its name) will lead society, though people with the resources like placing bets in stock markets on the direction It is taking us. On the other hand, if people have an idea which direction society should be heading in, public control over finance is a precondition to making it so.

Passer by , Aug 3 2019 0:32 utc | 36
Posted by: karlof1 | Aug 3 2019 0:19 utc | 34

"The continuing practice of Neoliberalism by the Outlaw US Empire"

I'm not sure this will be the case anymore -

Former heads of DHS and NSA explain how the U.S. can keep Huawei at bay

"Perhaps more importantly, this proposal demonstrates one way the U.S. can reinforce elements of what the government calls the “national technology and industrial base” (NTIB), the collection of companies who design, build and supply the U.S. with vital national-security related technologies."

https://www.cnbc.com/2019/07/11/chertoff-mcconnell-us-needs-to-have-more-allies-to-bypass-huawei.html

[Aug 03, 2019] China's UN Envoy Says If US Wants To Fight, We Will Fight, Warns Beijing Will No Longer Allow Hong Kong Protests

Aug 03, 2019 | www.zerohedge.com

he war of words between the world's top superpowers is getting more heated by the hour.

China's new ambassador to the United Nations, Zhang Jun, said on Friday that if the United States wanted to fight China on trade, "then we will fight" and warned that Beijing was prepared to take countermeasures over new U.S. tariffs, Reuters reports.

"China's position is very clear that if U.S. wishes to talk, then we will talk, if they want to fight, then we will fight," he told reporters. Calling Trump latest tariff announcement an "irrational, irresponsible act", Jun said that China "definitely will take whatever necessary countermeasures to protect our fundamental right, and we also urge the United States to come back to the right track in finding the right solution through the right way." The ambassador also took a stab at the disintegration of good relations between the US and North Korea (with Beijing's blessing no doubt), saying that "you cannot simply ask DPRK to do as much as possible while you maintain the sanctions against DPRK, that definitely is not helpful" Yun said siding the the Kim regime. It was more than obvious who the "you" he referred to was.

Pouring more salt on the sound, the Chinese diplomat said North Korea should be encourage, and "we think at an appropriate time there should be action taken to ease the sanctions", explicitly taking Pyongyang's side in the ongoing diplomatic saga between Kim and Trump.

When asked if China's trade relations with the United States could harm cooperation between the countries on dealing with North Korea, Zhang said it would be difficult to predict. He added: "It will be hard to imagine that on the one hand you are seeking the cooperation from your partner, and on the other hand you are hurting the interests of your partner."

As North Korea's ally and neighbor, China's role in agreeing to and enforcing international sanctions on the country over its nuclear and ballistic missile programs has been crucial.

However, it is what he said last that was most notable, as it touched on what will likely be the next big geopolitical swan, namely Hong Kong. To wit, Jun said that while Beijing is willing to cooperate with UN member states, it will never allow interference in "internal affairs" such as the controversial regions of Xinjiang and Tibet, and - last but not least - Hong Kong.

And in the latest warning to the defiant financial capital of the Pacific Rim, Jun virtually warned that a Chinese incursion is now just a matter of time, he said that Hong Kong protests are "really turning out to be chaotic and violent and we should no longer allow them to continue this reprehensible behavior."

... ... ...

[Aug 03, 2019] Bloomberg Economics initial estimate of the additional costs of U.S. tariffs and Chinese retaliation sees both economies taking a 0.2% hit to GDP by 2021

This might speed up "Trump recession"
Aug 03, 2019 | www.bloomberg.com

President Donald Trump's threat Thursday to put 10% tariffs on the remaining $300 billion of Chinese imports that aren't subject to his existing levies sent markets tumbling from Asia to Europe and in the U.S. on Friday. The new tax would hit American consumers, and businesses are going to face even more supply disruptions . China has already vowed to retaliate if Trump follows through.

Bloomberg Economics ' initial estimate of the additional costs of U.S. tariffs and Chinese retaliation sees both economies taking a 0.2% hit to GDP by 2021.

Meanwhile, a simmering trade fight between Japan and South Korea is boiling over , putting the health of two Asian export powers at stake. In Europe, concerns are mounting for a hard U.K. exit from the European Union.

The week ended with fresh numbers out of Washington that show U.S. trade actually declined during the first six months of the year as exports flattened out.

[Aug 03, 2019] Trump created a significant motivation in Europe and even China in creating a real alternative to the US dollar for international transactions which bypasses US banks. If this happens to any significant degree, it would undercut the US dollar as the world's reserve currency, resulting in a permanent drop in its value.

Aug 03, 2019 | www.nakedcapitalism.com

Noel Nospamington , August 3, 2019 at 10:50 am

I think that 10 years from now the biggest impact from Trump will be from his cancellation of the Iran nuclear accord and unilateral imposition of strict sanctions which the Europeans were not able to bypass in any meaningful way due the prevalence of the US dollar in global transactions.

There is now significant motivation in Europe and even China in creating a real alternative to the US dollar for international transactions which bypasses US banks. If this happens to any significant degree, it would undercut the US dollar as the world's reserve currency, resulting in a permanent drop in its value.

Without international support, US Government deficits and trade deficits will become unsustainable, and there will be a significant drop in the American median standard of living.

[Aug 03, 2019] The overwhelming correlation between austerity and Brexit

Aug 03, 2019 | economistsview.typepad.com

Christopher H. , July 23, 2019 at 03:27 PM

how those like kurt who mock economic anxiety are wrong

https://theweek.com/articles/853784/overwhelming-correlation-between-austerity-brexit

The overwhelming correlation between austerity and Brexit
Jeff Spross

July 22, 2019

Across the pond, the Brexit disaster continues to unfold in newly disastrous ways. Theresa May has resigned as prime minister, and the Trump-esque Boris Johnson looks like a lock to replace her. Parliament members -- up to and including Johnson's own fellow Conservatives -- are panicking that the new prime minister may try hardline tactics to force Brexit through, plan or no plan.

At this point, predicting how this mess will end is a fool's errand. But there are still lessons to be learned from how it began.

In particular, the Conservatives might want to look in the mirror -- and not just because it was their government that called the Brexit vote in the first place. It turns out the brutal austerity they imposed on Britain after the global 2008 financial crisis probably goes a long way towards explaining why Brexit is happening at all.

In the run-up to the Brexit referendum in 2016, much of the campaigning in favor of "Leave" was unabashedly racist. Hard-right political groups like the U.K. Independence Party (UKIP) painted a picture of native Britons overrun by hordes of foreign immigrants that were straining the country's health care, housing, public services, jobs and wages to the breaking point. The thing is, the racism was a particular poisonous way of framing a very real underlying economic fear: all those necessities really had become harder to come by.

Yet, as it is in America, actual evidence linking influxes of immigrants to rising scarcity in jobs and wages and other services is scarce. But something else had also recently happened that could explain why hospitals and schools were closing and why public aid was drying up: massive cuts to government spending.

A decade ago, the aftershocks of the global financial crisis had shrunk Britain's economy by almost 3 percent, kicking unemployment up from 5 percent to 8 percent by 2010. Under then-Prime Minister David Cameron, the Conservatives in power concluded that "confidence" among investors was necessary to restore economic growth -- and that meant cuts to government spending to balance the budget.

Thus the Conservatives pushed through a ferocious austerity package: Overall government spending fell 16 percent per person. Schools, libraries, and hospitals closed; public services like garbage collection ground to a halt; poverty shot up; and homelessness doubled. Despite unemployment staying stubbornly high and GDP growth staying stubbornly low -- in defiance of their own economic theory -- the Conservatives crammed through even more reductions in 2012. "It is hard to overestimate how devastating Cameron's austerity plan was, or how fast it happened," the British journalist Laurie Penny observed. A United Nations report from last year called the cuts "punitive, mean-spirited, and often callous."

But the damage was not evenly distributed across the country. At the district level -- Britain's units of local governance -- the reductions in spending ranged from 6.2 percent to an astonishing 46.3 percent from 2010 to 2015. The districts that were already the poorest were generally the hardest hit.

These differences across districts allowed Thiemo Fetzer, an associate professor of economics at the University of Warwick, to gauge the correlation between the government cuts and whether a district voted Leave or Remain. "Austerity had sizable and timely effects, increasing support for UKIP across local, national, and European elections," Fetzer wrote in a recent paper. He found that UKIP's share of a district's vote jumped anywhere from 3.5 to 11.9 percentage points in correlation with austerity's local impact. "Given the tight link between UKIP vote shares and an area's support for Leave, simple back-of-the-envelope calculations suggest that Leave support in 2016 could have been easily at least 6 percentage points lower," Fetzer continued. As tight as the Brexit referendum was, that alone could have been enough to swing it.

Other studies have shown links between how a local British community's economic fortunes fared and how it voted for Brexit as well. Economists Italo Colantone and Piero Stanig found that support for Leave was "systematically higher" in the regions of the country hit hardest by trade with China over the last three decades. Another analysis by Torsten Bell showed a strong correlation between British income inequality as of 2015 and Brexit support, with higher local vote shares for Leave the lower the local incomes were. (It's worth noting the Bell didn't find a correlation with Brexit when he looked at how local incomes changed from 2002 to 2015, but that's also a weird time frame to choose, as it mashes together a period of wage growth before 2008 with a major drop afterwards.)

Inequality in Britain had been worsening for decades, as the upper class in the City of London pulled further and further ahead of the largely rural working class, setting the stage for Brexit. And then austerity fell hardest on the shoulders of the latter group, compounding the effect.

"Individuals tend to react to the general economic situation of their region, regardless of their specific condition," Colantone and Stanig wrote. But Fetzer was able to break out some individual data in his analysis of austerity, and he found a correlation with Brexit votes there as well. Individual Britons who were more exposed to welfare state cuts -- in particular a reduction in supports for housing costs -- were again more likely to vote for UKIP. "Further, they increasingly perceive that their vote does not make a difference, that they do 'not have a say in government policy' or that 'public officials do not care,'" Fetzer observed.

It isn't that the economic dislocation of the 2008 crisis and the ensuing austerity crunch made Britons more racist. By all accounts, half or more of the country has consistently looked askance on immigration going back decades. (Indeed, international polling suggests a certain baseline dislike for immigration is a near-universal human condition.) What changed in the last few years was the willingness of certain parts of British society to act politically on those attitudes. And that, arguably, is where the economics come in.

Work from the Harvard economist Benjamin Friedman is instructive here. He found that periods of economic growth, where people feel the future is bright, make national populations more open, generous, and liberal. Times of economic contraction and stagnation have the opposite effect.

The British people, like everyone everywhere, are a mix of good and evil impulses. But by decimating public investment in a self-destructive quest for investor-led growth, the British government created a monster from those impulses. And the reckoning for that terrible error is still unfolding.

Christopher H. said in reply to Christopher H.... , July 23, 2019 at 03:28 PM
if - what should I call them? centerists? - like Krugman, Kurt and EMike really cared about racism they'd be in favor of ambitious programs so that voters' living standards rise.

Instead they push incrementalism and make excuses about Dems never having any power.

JohnH -> Christopher H.... , July 23, 2019 at 03:33 PM
Tut! Tut! Tut! It's not politically correct for Democrats to talk about the economy, inequality, and dislocation, is it? If people keep raising the issue, Democrats might be forced into acknowledging problems they helped to create. Worse, they might have to craft a coherent economic message that their Big Money puppeteers might not like! OMG!!! Armageddon!!!
Joe -> Christopher H.... , July 23, 2019 at 04:08 PM
He presented no evidence, just pundicizing based on priors.

Well I looked and could find no change in growth, it has been declining steadily since 1990, and the ten years has been correspondingly dropping since 1980.

So, I I am supposed to see evidence, then cite the chart I am supposed to look at. We are tired of useless pundicizers.

Christopher H. said in reply to Joe... , July 23, 2019 at 06:10 PM
no he is presenting the agreed-upon evidence. Austerity hurt the UK.

Cranks like you have no place in the discussion. Go entertain yourself somewhere else.

Joe -> Christopher H.... , July 24, 2019 at 03:15 AM
No, he would have cited evidence.
If he had any brains he would have recognized that we got the secstags going around, meaning the one cannot just look at the eight year recession cycle, one has to look at the full monetary cycle.
It is easy to tell the dufas among economists, they never look at nor cite any data.

For example, Krugman ignored the fact that Obamacare raised monthly taxes about $500 per household, lost four elections, proved himself a dolt and now want to write off Obamacare. Never once did Krugman make any attempt to correlate the Obamacare taxes with election losses, not once. He preferred the delusion, same as most of our favorite economists, I can count the one who actually look.

As Kurt said, being delusional hysterical freaks who send hundreds of billions to wealthy people then complain? Stupid,stupid stupid.

kurt -> Joe... , July 25, 2019 at 10:45 AM
You are exactly right here - Obamacare subsidies should have tapered off or been taxed away around the top 20% of income rather than the top 60. Big mistake - but it was a compromise to get several republicans to vote yes, but they (the Rs) negotiated in bad faith and then didn't do what they promised. But hey - when have the H brothers let facts get in the way of what they know, know, know about me.
Christopher H. said in reply to kurt... , July 25, 2019 at 07:03 PM
Joe said nothing of the kind.

The Rs didn't do what they promised? What did you expect?

you're a naive sucker

[Aug 02, 2019] Global Smartphone Shipments Plunge Again, Huawei Displaces Apple As No.2

Aug 02, 2019 | www.zerohedge.com

The global smartphone bust is currently underway (has been for some time) - but there's a new, surprising trend that could highlight one reason why the Trump administration has waged economic war against China.

First, let's start with the global smartphone shipment data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker.

This new data details how worldwide smartphone shipments fell 2.3% in 2Q19 YoY. It also states that smartphone manufacturers shipped 333.2 million phones in 2Q19, which was up 6.5% QoQ.

An escalating trade war between the US and China contributed to sharp declines in shipments in both countries over the last year. However, the declines weren't nearly as severe as expected in China over 1H19 versus 1H18, suggesting that three years of a smartphone bust in Asia could be nearing a recovery phase. Asia/Pacific (excluding Japan and China) maintained solid momentum in 2Q YoY, with shipments up 3% in the quarter fueled by Southeast Asia markets.

The surprising trend IDC detected is that Huawei surpassed Apple in 2Q19, making it the first time in seven years that Samsung and Apple weren't the top smartphones manufactures in the world.

Now it seems that a South Korea company [Samsung] and a Chinese company [Huawei] are the world leaders in smartphone shipments, something that has irritated the Trump administration.

Samsung ranked No.1 with 75.5 million shipments in 2Q19, a 5.5% YoY increase. Huawei was No.2 with 58.7 million shipments in 2Q19, a 8.3% YoY jump. Apple was No.3 with 33.8 million shipments in 2Q19, a -18.2% YoY plunge.


Cheap Chinese Crap , 1 minute ago link

So let's see if I got this straight:

1) Huawei announces a .6% decline in shipments worldwide over the Q1 numbers.

2) Huawei announces an all-time high in domestic operations that now take up 62% of its sales.

What do these two numbers hide?

That Huawei's shipments to the international market must have suffered a considerable decline.

That the rise in sales in low-value Chinese phones doesn't begin to offset the large drop in high-value developed world sales except on a purely nominal numerical basis of numbers of phones sold. The money isn't in the phones. It's in the plans. In fact, China pioneered the idea of giving the phones away for free and then making it all back on the gated connection plans.

But there's no way that one Chinese plan equals one western plan in profitability back to the company, so buffing up the domestic numbers at the expense of the cash cow numbers overseas is ultimately not a good business strategy.

Plus of course Huawei can report any number it wants inside China and nobody has any way of testing its veracity. They could have shipped 20,000,000 phones to distributors on consignment and then marked it up as sales.

TheABaum , 6 minutes ago link

Apple's been running on momentum since 2011. Cook isn't Jobs.

Max.Power , 19 minutes ago link

Apple is trapped in a once-brilliant marketing strategy which it struggles to escape now: hi-end expensive devices.

It's not a hi-end product anymore, so it becomes more difficult to justify the price even for true fans.

Omni Consumer Product , 4 minutes ago link

It's still high-end, per se. But the price premium is no longer justified because other companies have commoditized the high-end features.

Frankly, the company was doomed the moment Jobs died and the reins were turned over to Cook - an accountant by training, who clearly has no futurist vision or marketing skill whatsoever.

Jobs might have been a puffed up peacock, but he was a master of creating the Reality Distortion Field.

deFLorable hillbilly , 36 minutes ago link

Smartphones are no longer fun or new or anything other than a commodity.

Now they're also devices which even the dumbest know track your every thought, purchase, move, etc...

It's like having a little East German Stasi agent in your pocket.

I hope they all go broke.

TheABaum , 4 minutes ago link

The curse of always on, always with you, always spying and always misplaced.

He–Mene Mox Mox , 39 minutes ago link

There is one big problem that no one is talking about. The cell phone market is over saturated! Practically everyone has got a cell phone these days. It's like the auto industry. There has been an over production 10 billion automobiles in the world for 7.2 billion people, of which half really can't afford to buy, much less drive, or even have a place to park it. I have seen people with 3 and 4 cell phones, but you only have 2 ears. How are more cell phones going to help you? Even women don't multitask that well.

The only thing that would make sales better on cell phones is if you could combine the computing power of a Cray computer into a roll-up tablet. Or, maybe a brain implant would be even better.

deFLorable hillbilly , 33 minutes ago link

No, they'll realize that it's far easier to design phones that fall apart after 18 month than to keep building quality products. Like American cars.

Iconoclast422 , 40 minutes ago link

who the hell is buying 11 million pieces of iCrap each month?

navy62802 , 57 minutes ago link

Apple has slowly but steadily declined overall since Steve Jobs' death. It's really sad to see the company steadily decline like it has.

adr , 1 hour ago link

Apple's iPhone shipments and sales have been falling for five years. Yet the company added $600billion in marketcap during that time.

That is the insanity of Wall Street.

Max.Power , 22 minutes ago link

In modern days, even having a negative profit for years doesn't mean you can't increase market capitalization.

thereasonableinvestor , 1 hour ago link

Apple has moved on from the iPhone.

Tim Cook: "When you step back and consider Wearables and Services together two areas where we have strategically invested in last several years, they now approach the size of a Fortune 50 company."

[Aug 01, 2019] A 26-year-old billionaire is building virtual border walls -- and the federal government is buying

Aug 01, 2019 | economistsview.typepad.com

Fred C. Dobbs , July 30, 2019 at 06:53 AM

(Is this anything?)

A 26-year-old billionaire is building virtual border walls -- and the federal government is buying

Sam Dean - July 29, 2019

https://techxplore.com/news/2019-07-year-old-billionaire-virtual-border-wallsand.html

On a Friday afternoon in late July, a crowd of techies, military types and a few civilians deployed to the new Irvine, Calif., headquarters of Anduril Industries, a defense tech start-up, to sip hibiscus margaritas and admire the sensor towers and carbon-fiber drones on display. Dave Brubeck tinkled over the sound system, and the dress code skewed office casual and pastel, offset by the bright red pop of a lone "Make America Great Again" hat by the taco bar.

After an hour of socializing amid surveillance equipment, Palmer Luckey, the company's 26-year-old near-billionaire founder, mounted a stage for the ribbon-cutting. Luckey had wanted to use the company's namesake sword -- a legendary weapon in "The Lord of the Rings" wielded by the hero Aragorn -- for the ceremony. ...

Armed instead with large scissors, and wearing his trademark uniform of Hawaiian shirt, cargo shorts and flip-flops, he dropped some Tolkien on the audience.

"Anduril," he said, leaning into the long Elvish vowels, "means Flame of the West. And I think that's what we're trying to be. We're trying to be a company that represents not just the best technology that Western democracy has to offer, but also the best ethics, the best of democracy, the best of values that we all hold dear."

Along remote stretches of the U.S.-Mexico border, and on the perimeters of military bases around the world, Luckey's vision was already becoming reality. Customs and Border Protection is using Anduril's high-tech surveillance network as a "virtual wall" of interlinked, solar-powered sentry towers that can alert agents of suspicious activity, and the company has signed similar deals with U.S. and U.K. military branches. ...

likbez , August 01, 2019 at 09:07 AM
Much depends on the flow via particular area. If the flow is low this is probably a viable technological solution.

Cheaper then the physical wall as spacing between towers can be hundred yards or even more.

Solar powered towers is an interesting feature suitable for this particular area, where sun is abundant during the year.

Drones add flexibility of following intruders "from above" until they are captured, but how efficient they are at night remains to be seen. Again this presupposes a very low flow in the guarded area.

In any case the main task of walls and other entrance barriers is to slow down the flow not to eliminate it completely.

So that those who manage to penetrate the barrier can be dealt with more quickly and efficiently.

[Aug 01, 2019] Trump will put additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China on Sept 1, 2019

Aug 01, 2019 | www.zerohedge.com

Just as investors thought it was safe to buy-the f**king-dip after Powell's plunge, President Trump steals the jam out of their donut by announcing new China tariffs...

"... on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country "

In a series of tweets, Trump laid out the state of the China trade deal... in a word - terrible...

Our representatives have just returned from China where they had constructive talks having to do with a future Trade Deal. We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed to...

...buy agricultural product from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die! Trade talks are continuing, and...

...during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%...

...We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!

[Aug 01, 2019] Fortunately, as Trump said, 'Trade Wars are easy to win!

Notable quotes:
"... Mr. Trump's anger was fueled, in part, by the fact that China has not begun buying large amounts of American farm products, which the president promised farmers would happen after a June meeting with Chinese President Xi Jinping. ..."
"... Mr. Trump took credit for China's weakening economy, saying the tariffs he's placed on $250 billion worth of Chinese goods have put enormous pressure on the country, costing it jobs and prompting companies to leave. ..."
"... American and Chinese negotiators finished talks on Wednesday with little progress toward ending a trade war that has shaken the world's economic confidence and rattled markets. ..."
"... Instead, both sides appear to be settling in for a lengthy economic conflict. ..."
"... Senior Chinese officials who gathered at an economic meeting on Tuesday run by China's top leader, Xi Jinping, stressed that the country had to rely on domestic demand to manage "new risks and challenges" and ward off what they described as "downward pressure on the economy," according to the Chinese state news media. China could turn "a crisis into an opportunity," the report added. ..."
"... A lengthy trade war presents China's leaders with some difficult options. China is enduring an economic slowdown that has been made worse by the trade tensions. Beijing has responded by ratcheting up spending on infrastructure and other big-ticket projects, a reliable growth strategy that nevertheless could worsen the country's debt problems and do little to solve economic imbalances that could hinder its long-term prospects. ..."
"... At a daily news briefing on Wednesday, Hua Chunying, a spokeswoman for the Chinese Foreign Ministry, said that "only if the U.S. shows sufficient integrity and sincerity, and conducts trade talks with the spirit of equality, mutual respect, mutual understanding and mutual accommodation, can the trade talks make progress." ... ..."
"... the trade pressure by the United States on China has from the beginning been about undermining Chinese development. The US point has always been to stop Chinese scientific and technological advance but the Chinese have always understood and that is just not ever going to happen. ..."
"... Accept United States restrictions on Chinese investments in sensitive technologies without retaliating. ..."
"... Open up its services and agricultural sectors to full American competition. ..."
Aug 01, 2019 | economistsview.typepad.com

Fred C. Dobbs , July 30, 2019 at 10:52 AM

President Trump took credit for weakening
China's economy and downplayed the likelihood
of a trade deal before the 2020 election.

His comments came as his top negotiators were sitting
down to dinner with their counterparts in Shanghai.

Trump Goads China as Trade Talks
Resume https://nyti.ms/32X4vBj
NYT - Ana Swanson and Jeanna Smialek - July 30

WASHINGTON -- President Trump lashed out at China on Tuesday morning as trade talks between the two nations resumed, taking credit for weakening China's economy and downplaying the likelihood of a deal before the 2020 election.

The president's comments, in posts on Twitter and remarks to the press, came just as his top negotiators were sitting down to dinner with their counterparts at the Fairmont Peace Hotel in Shanghai. While both sides are trying to get trade talks back on track, Mr. Trump's angry words underscored the diminishing prospects for a transformative trade deal anytime soon and the extent to which the bilateral relationship has not unfolded in the way that Mr. Trump expected.

"I think the biggest problem to a trade deal is China would love to wait and just hope," the president said. "They hope -- it's not going to happen, I hope, but they would just love if I got defeated so they could deal with somebody like Elizabeth Warren or Sleepy Joe Biden or any of these people, because then they'd be allowed and able to continue to rip off our country like they've been doing for the last 30 years."

Mr. Trump's anger was fueled, in part, by the fact that China has not begun buying large amounts of American farm products, which the president promised farmers would happen after a June meeting with Chinese President Xi Jinping. Mr. Trump emerged from that meeting in Osaka, Japan, saying he had agreed to postpone tariffs on an additional $300 billion of Chinese products and allow American firms to resume sales of nonsensitive goods to the Chinese telecom firm Huawei. In return, Mr. Trump said China would immediately start buying American agricultural goods, touting it as a big win for farmers.

But no such purchases have happened, and, in the weeks since, Chinese officials disputed that they had agreed to buy more farm products as a condition of the talks. On Sunday, Chinese state media reported that "millions of tons" of American soybeans had been shipped to China. But Mr. Trump on Tuesday said no such purchases had materialized.

China "was supposed to start buying our agricultural product now -- no signs that they are doing so," Mr. Trump tweeted. "That is the problem with China, they just don't come through."

His comments on Tuesday appeared to be an effort to give his negotiators more leverage and to pressure China into making concessions in talks this week. Mr. Trump took credit for China's weakening economy, saying the tariffs he's placed on $250 billion worth of Chinese goods have put enormous pressure on the country, costing it jobs and prompting companies to leave.

But he seemed to veer between goading China to quickly accede to America's demands and suggesting the country could get a better deal if it waits and a Democrat wins the 2020 presidential election. ...

Fred C. Dobbs , July 31, 2019 at 06:50 AM
US-China Trade Talks End With No Deal
in Sight https://nyti.ms/2GE3LHt
NYT - Alexandra Stevenson - July 31

American and Chinese negotiators finished talks on Wednesday with little progress toward ending a trade war that has shaken the world's economic confidence and rattled markets.

Treasury Secretary Steven Mnuchin and Robert E. Lighthizer, the Trump administration's top trade negotiator, were seen leaving trade talks on Wednesday, the Chinese state news media said.

Both sides "conducted frank, efficient and constructive in-depth exchanges on major issues of common interest in the economic and trade field," said a statement late in the day that was released by CCTV, China's state broadcaster.

Another round of high-level talks will take place in the United States in September, CCTV reported.

The Trump administration had not yet released its own statement.

The meeting marked the first formal resumption of talks after negotiations fell apart almost three months ago, with each side pointing fingers at the other for derailing a deal. They agreed to try again after meeting last month on the sidelines of the Group of 20 summit meeting in Osaka, Japan.

Instead, both sides appear to be settling in for a lengthy economic conflict.

Senior Chinese officials who gathered at an economic meeting on Tuesday run by China's top leader, Xi Jinping, stressed that the country had to rely on domestic demand to manage "new risks and challenges" and ward off what they described as "downward pressure on the economy," according to the Chinese state news media. China could turn "a crisis into an opportunity," the report added.

A lengthy trade war presents China's leaders with some difficult options. China is enduring an economic slowdown that has been made worse by the trade tensions. Beijing has responded by ratcheting up spending on infrastructure and other big-ticket projects, a reliable growth strategy that nevertheless could worsen the country's debt problems and do little to solve economic imbalances that could hinder its long-term prospects.

Should China reach a quick deal, on the other hand, the country's leaders risk looking weak in the face of foreign powers, undermining the Communist Party's historical claim to rule.

At a daily news briefing on Wednesday, Hua Chunying, a spokeswoman for the Chinese Foreign Ministry, said that "only if the U.S. shows sufficient integrity and sincerity, and conducts trade talks with the spirit of equality, mutual respect, mutual understanding and mutual accommodation, can the trade talks make progress." ...

anne -> Fred C. Dobbs... , July 31, 2019 at 07:36 AM
As I have repeatedly documented on Economist's View, the trade pressure by the United States on China has from the beginning been about undermining Chinese development. The US point has always been to stop Chinese scientific and technological advance but the Chinese have always understood and that is just not ever going to happen.
anne -> Fred C. Dobbs... , July 31, 2019 at 07:37 AM
https://www.washingtonpost.com/news/wonk/wp/2018/05/04/trump-is-asking-china-to-redo-just-about-everything-with-its-economy/

May 4, 2018

Trump is asking China to redo just about everything with its economy
By Heather Long - Washington Post

The Trump administration has finally presented the Chinese government with a clear list of trade demands. It's long and intense (there are eight sections), and President Trump isn't just asking Chinese President Xi Jinping for a few modifications. He's asking Xi to completely change his plans to turn the Chinese economy into a tech powerhouse.

The demands include the following:

• China will cut the $336 billion U.S.-China trade deficit by at least $200 billion by 2020, a 60 percent reduction.
• China will stop subsidizing tech companies.
• China will cease stealing U.S. intellectual property.
• China will cut its tariffs on U.S. goods by 2020.
• China will not retaliate against the United States (including against U.S. farmers).
• The Chinese government will open China to more U.S. investment.

anne -> Fred C. Dobbs... , July 31, 2019 at 07:38 AM
https://www.nytimes.com/2018/05/04/business/china-us-trade-talks.html

May 4, 2018

U.S.-China Trade Talks End With Strong Demands, but Few Signs of a Deal
By Keith Bradsher

BEIJING -- The extensive list of United States trade demands was unexpectedly sweeping, and showed that the Trump administration has no intention of backing down despite Beijing's assertive stance in the last few days. "The list reads like the terms for a surrender rather than a basis for negotiation," said Eswar Prasad, an economics professor at Cornell University.

Here are the highlights of the demands:

China must

■ Cut its trade surplus by $100 billion in the 12 months starting in June, and by another $100 billion in the following 12 months.

■ Halt all subsidies to advanced manufacturing industries in its so-called Made In China 2025 program. The program covers 10 sectors, including aircraft manufacturing, electric cars, robotics, computer microchips and artificial intelligence.

■ Accept that the United States may restrict imports from the industries under Made in China 2025.

■ Take "immediate, verifiable steps" to halt cyberespionage into commercial networks in the United States.

■ Strengthen intellectual property protections.

Accept United States restrictions on Chinese investments in sensitive technologies without retaliating.

■ Cut its tariffs, which currently average 10 percent, to the same level as in the United States, where they average 3.5 percent for all "noncritical sectors."

Open up its services and agricultural sectors to full American competition.

The United States also stipulated that the two sides should meet every quarter to review progress.

Fred C. Dobbs said in reply to anne... , July 31, 2019 at 07:51 AM
Fortunately, as Trump said,
'Trade Wars are easy to win!'

[Aug 01, 2019] Brexit like Trump election was a protest against neoliberal globalization. A sign of collapse of neoliberal ideology and the grip of neoliberal elite on the population.

Aug 01, 2019 | economistsview.typepad.com

anne , July 31, 2019 at 11:06 AM

https://mainly macro.blogspot.com/2019/07/there-is-no-mandate-for-no-deal.html

July 31, 2019

There is no mandate for No Deal

We are told constantly that the 2016 referendum gives our government a mandate for a No Deal Brexit, and that we would not respect democracy if we failed to leave. Both arguments are obviously false, yet they so often go unchallenged in the media.

... ... ...

-- Simon Wren-Lewis

likbez -> anne... , August 01, 2019 at 09:51 AM
Brexit like Trump election was a protest against neoliberal globalization. A sign of collapse of neoliberal ideology and the grip of neoliberal elite on the population.

In essence, a "no confidence" vote for the neoliberal elite in both countries.

Of course, Simon Wren-Lewis is afraid to acknowledged this and is engaged in sophistry.

[Jul 30, 2019] EU bureaucracy is not compatible with UK identity.

Jul 30, 2019 | www.moonofalabama.org

Noirette , Jul 30 2019 15:42 utc | 94

EU bureaucracy is not compatible with UK identity.

I agree re. a sort of fundamental 'spirit'. So far, since 1973 (EEC, idk if this was properly done, you say not: fraudulent ) EU-UK relations have not been riven by disruptive strife or even temp. explosive argument (in part due to EU rules etc.) Accomodations were made.. An apogee of hand-holding-harmony was reached when Mitterand and Thatcher convinced the Germans to give up the D-mark in return for blessing the re-unification of Germany. The UK did not join the Euro zone (1992). So the UK was overall a big 'winner' on several levels (imho.)

Brexit is the first step in bringing politics back to local accountability

I hope so but dangers lurk and i am pessimistic. Crash-out on 31 Oct. will happen, and will have a horrific impact. In any case the political accountability of the Gvmt. in the UK is at present abysmally low.

[Jul 30, 2019] Donald Trump s ruthless use of the centrality of his country s financial system

Trump definitely contributes a lot to the collapse of classic neoliberalism. He rejected neoliberal globalization in favor of using the USA dominant position for cutting favorable to the USA bilateral deals. That undermined the role of dollar of the world reserve currency and several mechanisms emerged which allow completely bypass dollar system for trade.
Notable quotes:
"... US President Donald Trump's ruthless use of the centrality of his country's financial system and the dollar to force economic partners to abide by his unilateral sanctions on Iran has forced the world to recognise the political price of asymmetric economic interdependence. ..."
"... A new world is emerging, in which it will be much harder to separate economics from geopolitics. ..."
Jul 06, 2019 | www.nakedcapitalism.com

US President Donald Trump's ruthless use of the centrality of his country's financial system and the dollar to force economic partners to abide by his unilateral sanctions on Iran has forced the world to recognise the political price of asymmetric economic interdependence.

In response, China (and perhaps Europe) will fight to establish their own networks and secure control of their nodes. Again, multilateralism could be the victim of this battle.

A new world is emerging, in which it will be much harder to separate economics from geopolitics. It's not the world according to Myrdal, Frank, and Perroux, and it's not Tom Friedman's flat world, either. It's the world according to Game of Thrones .


Synoia , July 5, 2019 at 11:14 am

A new world is emerging, in which it will be much harder to separate economics from geopolitics.

Really? Why was Economics was originally named “Political Economy?”

vlade , July 5, 2019 at 1:36 pm

Politics is a continuation of economy by other means (well, you can write it the other way around too, TBH).

Summer , July 5, 2019 at 9:45 pm

It made me do a face palm. Somebody thought they had separated economics from geopolitics or power…or at least they wanted people to believe that and the jig is up.

fdr-fan , July 5, 2019 at 11:40 am

This paragraph is thought-provoking:

“One reason for this is that in an increasingly digitalised economy, where a growing part of services are provided at zero marginal cost, value creation and value appropriation concentrate in the innovation centers and where intangible investments are made. This leaves less and less for the production facilities where tangible goods are made.”

It depends on what you mean by value.

If value is dollars in someone’s Cayman Islands tax-free account, then value is concentrated in NYC and SF.

But if we follow Natural Law (Marx or Mohammed) and define value as labor, then this is exactly wrong. A Natural Law economy tries to maximize paid and useful work, because people are made to be useful.

The digital world steadily eliminates useful work, and steadily crams down the wages for the little work that remains. Real value is avalanching toward zero, while Cayman value is zooming to infinity.

Carolinian , July 5, 2019 at 12:35 pm

He’s talking more about the whims of the stock market and of our intellectual property laws. For example the marginal cost for Microsoft to issue another copy of “Windows” is zero. Even their revised iterations of the OS were largely a rehash of the previous software. Selling this at high prices worked out well for a long time but now the software can practically be had for free because competitors like Linux and Android are themselves free. So digital services with their low marginal cost depend on a shaky government edifice (patent enforcement, lack of antitrust) to prop up their value. Making real stuff still requires real labor and even many proposed robot jobs–driving cars, drone deliveries, automated factories and warehouses–are looking dubious. Dean Baker has said that the actual investment in automation during the last decades has slowed–perhaps because expensive and complicated robots may have trouble competing with clever if poorly paid humans. And poorly paid is the current reality due to population increases and political trends and perhaps, yes, automation.

And even if the masters of the universe could eliminate labor they would then have nobody to buy their products. The super yacht market is rather small.

eg , July 6, 2019 at 5:39 am

pour encourager les autres …

a different chris , July 5, 2019 at 12:14 pm

>the distribution of gains from openness and participation in the global economy is increasingly skewed. …. True, protectionism remains a dangerous lunacy.

Well “openness and participation” is looking like lunacy to the Deplorables for exactly the reason given, so what is actually on offer here?

Lee , July 5, 2019 at 12:37 pm

With useful physical labor being off-shored, first world citizens should all be made shareholders in the new scheme. We shall all then become dividend collecting layabouts buying stuff made by people we do not know, see, or care about. If they object we simply have the military mount a punitive expedition until they get whipped back into shape. Sort of like now but with a somewhat larger, more inclusive shareholder base. It will be wonderful!

CenterOfGravity , July 5, 2019 at 1:58 pm

Are you sayin’ the lefty Social Wealth Fund concept is really just another way of replicating the same old bougie program of domination and suppression?

Check out Matt Bruenig’s concept below. The likelihood that endlessly pursuing wealthy tax dodgers will be a fruitless and lost effort feels like a particularly persuasive argument for a SWF: https://www.peoplespolicyproject.org/projects/social-wealth-fund/

Lee , July 5, 2019 at 2:26 pm

I’m saying that it can be and historically, and that there are and have been multi-national systems of super exploitation of peripheral, primarily resource exporting populations, relative to a more broadly distributed prosperity for “higher” skilled populations of the center. This has been a common perspective within anti-imperialist movements.

The argument is not without merit. Is this a “contradiction among the people” where various sectors of a larger labor movement can renegotiate terms, or is it some more intransigent, deeply antagonistic relationship is a crucial question. The exportation of manufacturing to the periphery is disrupting the political status-quo as represented by the center’s centrism, political sentiments are breaking away to the left and right and where they’ll land nobody knows.

Ignacio , July 5, 2019 at 12:16 pm

Do not forget mentioning how the tax system has been gamed to increase rent extraction and inequality.

samhill , July 5, 2019 at 12:32 pm

Why is Iran such a high priority for so many US elites?

I was just reading this John Helmer below, like Pepe Escobar I’m not sure who’s buttering his bread but it’s all food for thought and fresh cooked blinis are tastier than the Twinkies from the western msm, and this thought came to mind: Iran is the perfect test ground for the US to determine Russian weapons and tactical capabilities in a major war context in 2019. That alone might make it worth it to the Pentagon, why they seem so enthusiastic to take the empire of chaos to unforseen heights (depts?). Somewhat like the Spanish Civil War was a testing ground for the weapons of WW2.

http://johnhelmer.org/against-the-blitz-wolf-russian-reinforcements-for-irans-defence-in-war-against-all/

Synoia , July 5, 2019 at 12:56 pm

Speculation:

1. Because it has a lot of non US controlled Oil.
2. Because it is Central on the eastern end of the silk road.
3. Because it does not kiss the US Ring bearers hand at every opportunity, and the US is determined to make it an example not to be followed.

John k , July 5, 2019 at 1:27 pm

But consider Saudi us relations… who is kissing who’s ring?
Or consider Israeli us relations… ditto.
We’re a thuggish whore whose favors are easily bought; bring dollars or votes. Or kiss the ring.

Susan the other` , July 5, 2019 at 1:51 pm

An environmental insight here. The world stands devastated. It has reached its carrying capacity for thoughtless humans. From here on in we have to take the consequences of our actions into account. So when it is said, as above, that the dollar exchange rate is more important than the other bilateral exchange rates, I think that is no longer the reality. There is only a small amount of global economic synergy that operates without subsidy. The vast majority is subsidized. And the dollar is just one currency. And, unfortunately, the United States does not control the sun and the wind (well we’ve got Trump), or the ice and snow. Let alone the oceans. The big question going forward is, Can the US maintain its artificial economy? Based on what?

Old Jake , July 5, 2019 at 2:51 pm

That is a factor that seems ignored by the philosophers who are the subjects of the headline posting. It is a great oversight, a shoe which has been released and is now impacting the floor. “The best laid schemes o’ mice an’ men”

Brian Westva , July 5, 2019 at 6:13 pm

Unfortunately our economy is based on the military industrial surveillance complex.

Sound of the Suburbs , July 6, 2019 at 2:53 pm

A multi-polar world became a uni-polar world with the fall of the Berlin Wall and Francis Fukuyama said it was the end of history.

The Americans had other ideas and set about creating another rival as fast as they possibly could, China.

China went from almost nothing to become a global super power.

The Americans have realised they have messed up big time and China will soon take over the US as the world’s largest economy.

Beijing has taken over support for the Washington consensus as they have thirty years experience telling them how well it works for them.

The Washington consensus is now known as the Beijing consensus.

[Jul 29, 2019] Michael Hudson Trump s Brilliant Strategy to Dismember US Dollar Hegemony by Michael Hudson

Highly recommended!
Looks like the world order established after WWIII crumbed with the USSR and now it is again the law if jungles with the US as the biggest predator.
Notable quotes:
"... The root cause is clear: After the crescendo of pretenses and deceptions over Iraq, Libya and Syria, along with our absolution of the lawless regime of Saudi Arabia, foreign political leaders are coming to recognize what world-wide public opinion polls reported even before the Iraq/Iran-Contra boys turned their attention to the world's largest oil reserves in Venezuela: The United States is now the greatest threat to peace on the planet. ..."
"... Calling the U.S. coup being sponsored in Venezuela a defense of democracy reveals the Doublethink underlying U.S. foreign policy. It defines "democracy" to mean supporting U.S. foreign policy, pursuing neoliberal privatization of public infrastructure, dismantling government regulation and following the direction of U.S.-dominated global institutions, from the IMF and World Bank to NATO. For decades, the resulting foreign wars, domestic austerity programs and military interventions have brought more violence, not democracy ..."
"... A point had to come where this policy collided with the self-interest of other nations, finally breaking through the public relations rhetoric of empire. Other countries are proceeding to de-dollarize and replace what U.S. diplomacy calls "internationalism" (meaning U.S. nationalism imposed on the rest of the world) with their own national self-interest. ..."
"... For the past half-century, U.S. strategists, the State Department and National Endowment for Democracy (NED) worried that opposition to U.S. financial imperialism would come from left-wing parties. It therefore spent enormous resources manipulating parties that called themselves socialist (Tony Blair's British Labour Party, France's Socialist Party, Germany's Social Democrats, etc.) to adopt neoliberal policies that were the diametric opposite to what social democracy meant a century ago. But U.S. political planners and Great Wurlitzer organists neglected the right wing, imagining that it would instinctively support U.S. thuggishness. ..."
"... Perhaps the problem had to erupt as a result of the inner dynamics of U.S.-sponsored globalism becoming impossible to impose when the result is financial austerity, waves of population flight from U.S.-sponsored wars, and most of all, U.S. refusal to adhere to the rules and international laws that it itself sponsored seventy years ago in the wake of World War II. ..."
"... Here's the first legal contradiction in U.S. global diplomacy: The United States always has resisted letting any other country have any voice in U.S. domestic policies, law-making or diplomacy. That is what makes America "the exceptional nation." But for seventy years its diplomats have pretended that its superior judgment promoted a peaceful world (as the Roman Empire claimed to be), which let other countries share in prosperity and rising living standards. ..."
"... Inevitably, U.S. nationalism had to break up the mirage of One World internationalism, and with it any thought of an international court. Without veto power over the judges, the U.S. never accepted the authority of any court, in particular the United Nations' International Court in The Hague. Recently that court undertook an investigation into U.S. war crimes in Afghanistan, from its torture policies to bombing of civilian targets such as hospitals, weddings and infrastructure. "That investigation ultimately found 'a reasonable basis to believe that war crimes and crimes against humanity." ..."
"... This showed that international finance was an arm of the U.S. State Department and Pentagon. But that was a generation ago, and only recently did foreign countries begin to feel queasy about leaving their gold holdings in the United States, where they might be grabbed at will to punish any country that might act in ways that U.S. diplomacy found offensive. So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. U.S. officials pretended to feel shocked at the insult that it might do to a civilized Christian country what it had done to Iran, and Germany agreed to slow down the transfer. ..."
"... England refused to honor the official request, following the direction of Bolton and U.S. Secretary of State Michael Pompeo. As Bloomberg reported: "The U.S. officials are trying to steer Venezuela's overseas assets to [Chicago Boy Juan] Guaido to help bolster his chances of effectively taking control of the government. The $1.2 billion of gold is a big chunk of the $8 billion in foreign reserves held by the Venezuelan central bank." ..."
"... But now, cyber warfare has become a way of pulling out the connections of any economy. And the major cyber connections are financial money-transfer ones, headed by SWIFT, the acronym for the Society for Worldwide Interbank Financial Telecommunication, which is centered in Belgium. ..."
"... On January 31 the dam broke with the announcement that Europe had created its own bypass payments system for use with Iran and other countries targeted by U.S. diplomats. Germany, France and even the U.S. poodle Britain joined to create INSTEX -- Instrument in Support of Trade Exchanges. The promise is that this will be used only for "humanitarian" aid to save Iran from a U.S.-sponsored Venezuela-type devastation. But in view of increasingly passionate U.S. opposition to the Nord Stream pipeline to carry Russian gas, this alternative bank clearing system will be ready and able to become operative if the United States tries to direct a sanctions attack on Europe ..."
"... The U.S. overplaying its position is leading to the Mackinder-Kissinger-Brzezinski Eurasian nightmare that I mentioned above. In addition to driving Russia and China together, U.S. diplomacy is adding Europe to the heartland, independent of U.S. ability to bully into the state of dependency toward which American diplomacy has aimed to achieve since 1945. ..."
"... By following U.S. advice, countries have left themselves open to food blackmail – sanctions against providing them with grain and other food, in case they step out of line with U.S. diplomatic demands. ..."
"... It is worthwhile to note that our global imposition of the mythical "efficiencies" of forcing Latin American countries to become plantations for export crops like coffee and bananas rather than growing their own wheat and corn has failed catastrophically to deliver better lives, especially for those living in Central America. The "spread" between the export crops and cheaper food imports from the U.S. that was supposed to materialize for countries following our playbook failed miserably – witness the caravans and refugees across Mexico. Of course, our backing of the most brutal military dictators and crime lords has not helped either. ..."
"... But a few years ago Ukraine defaulted on $3 billion owed to Russia. The IMF said, in effect, that Ukraine and other countries did not have to pay Russia or any other country deemed to be acting too independently of the United States. The IMF has been extending credit to the bottomless it of Ukrainian corruption to encourage its anti-Russian policy rather than standing up for the principle that inter-government debts must be paid. ..."
"... It is as if the IMF now operates out of a small room in the basement of the Pentagon in Washington. ..."
"... Anticipating just such a double-cross, President Chavez acted already in 2011 to repatriate 160 tons of gold to Caracas from the United States and Europe. ..."
"... It would be good for Americans, but the wrong kind of Americans. For the Americans that would populate the Global Executive Suite, a strong US$ means that the stipends they would pay would be worth more to the lackeys, and command more influence. ..."
"... Dumping the industrial base really ruined things. America is now in a position where it can shout orders, and drop bombs, but doesn't have the capacity to do anything helpful. They have to give up being what Toynbee called a creative minority, and settle for being a dominant minority. ..."
"... Having watched the 2016 election closely from afar, I was left with the impression that many of the swing voters who cast their vote for Trump did so under the assumption that he would act as a catalyst for systemic change. ..."
"... Now we know. He has ripped the already transparent mask of altruism off what is referred to as the U.S.-led liberal international order and revealed its true nature for all to see, and has managed to do it in spite of the liberal international establishment desperately trying to hold it in place in the hope of effecting a seamless post-Trump return to what they refer to as "norms". Interesting times. ..."
"... Exactly. He hasn't exactly lived up to advanced billing so far in all respects, but I suspect there's great deal of skulduggery going on behind the scenes that has prevented that. ..."
"... To paraphrase the infamous Rummy, you don't go to war with the change agent and policies you wished you had, you go to war with the ones you have. That might be the best thing we can say about Trump after the historic dust of his administration finally settles. ..."
"... Yet we find out that Venezuela didn't managed to do what they wanted to do, the Europeans, the Turks, etc bent over yet again. Nothing to see here, actually. ..."
"... So what I'm saying is he didn't make his point. I wish it were true. But a bit of grumbling and (a tiny amount of) foot-dragging by some pygmy leaders (Merkel) does not signal a global change. ..."
"... Currency regime change can take decades, and small percentage differences are enormous because of the flows involved. USD as reserve for 61% of global sovereigns versus 64% 15 years ago is a massive move. ..."
"... I discovered his Super Imperialism while looking for an explanation for the pending 2003 US invasion of Iraq. If you haven't read it yet, move it to the top of your queue if you want to have any idea of how the world really works. ..."
"... If it isn't clear to the rest of the world by now, it never will be. The US is incapable of changing on its own a corrupt status quo dominated by a coalition of its military industrial complex, Wall Street bankers and fossil fuels industries. As long as the world continues to chase the debt created on the keyboards of Wall Street banks and 'deficits don't matter' Washington neocons – as long as the world's 1% think they are getting 'richer' by adding more "debts that can't be repaid (and) won't be" to their portfolios, the global economy can never be put on a sustainable footing. ..."
"... In other words, after 2 World Wars that produced the current world order, it is still in a state of insanity with the same pretensions to superiority by the same people, to get number 3. ..."
"... Few among Washington's foreign policy elite seem to fully grasp the complex system that made U.S. global power what it now is, particularly its all-important geopolitical foundations. As Trump travels the globe, tweeting and trashing away, he's inadvertently showing us the essential structure of that power, the same way a devastating wildfire leaves the steel beams of a ruined building standing starkly above the smoking rubble." ..."
"... He's draining the swamp in an unpredicted way, a swamp that's founded on the money interest. I don't care what NYT and WaPo have to say, they are not reporting events but promoting agendas. ..."
"... The financial elites are only concerned about shaping society as they see fit, side of self serving is just a historical foot note, Trumps past indicates a strong preference for even more of the same through authoritarian memes or have some missed the OT WH reference to dawg both choosing and then compelling him to run. ..."
"... Highly doubt Trump is a "witting agent", most likely is that he is just as ignorant as he almost daily shows on twitter. On US role in global affairs he says the same today as he did as a media celebrity in the late 80s. Simplistic household "logics" on macroeconomics. If US have trade deficit it loses. Countries with surplus are the winners. ..."
"... Anyhow frightening, the US hegemony have its severe dark sides. But there is absolutely nothing better on the horizon, a crash will throw the world in turmoil for decades or even a century. A lot of bad forces will see their chance to elevate their influence. There will be fierce competition to fill the gap. ..."
"... On could the insane economic model of EU/Germany being on top of global affairs, a horribly frightening thought. Misery and austerity for all globally, a permanent recession. Probably not much better with the Chinese on top. I'll take the USD hegemony any day compared to that prospect. ..."
"... Former US ambassador, Chas Freeman, gets to the nub of the problem. "The US preference for governance by elected and appointed officials, uncontaminated by experience in statecraft and diplomacy, or knowledge of geography, history and foreign affairs" https://www.youtube.com/watch?annotation_id=annotation_882041135&feature=iv&src_vid=Ge1ozuXN7iI&v=gkf2MQdqz-o ..."
"... Michael Hudson, in Super Imperialism, went into how the US could just create the money to run a large trade deficit with the rest of the world. It would get all these imports effectively for nothing, the US's exorbitant privilege. I tied this in with this graph from MMT. ..."
"... The Government was running a surplus as the economy blew up in the early 1990s. It's the positive and negative, zero sum, nature of the monetary system. A big trade deficit needs a big Government deficit to cover it. A big trade deficit, with a balanced budget, drives the private sector into debt and blows up the economy. ..."
Feb 01, 2019 | www.nakedcapitalism.com

The end of America's unchallenged global economic dominance has arrived sooner than expected, thanks to the very same Neocons who gave the world the Iraq, Syria and the dirty wars in Latin America. Just as the Vietnam War drove the United States off gold by 1971, its sponsorship and funding of violent regime change wars against Venezuela and Syria – and threatening other countries with sanctions if they do not join this crusade – is now driving European and other nations to create their alternative financial institutions.

This break has been building for quite some time, and was bound to occur. But who would have thought that Donald Trump would become the catalytic agent? No left-wing party, no socialist, anarchist or foreign nationalist leader anywhere in the world could have achieved what he is doing to break up the American Empire. The Deep State is reacting with shock at how this right-wing real estate grifter has been able to drive other countries to defend themselves by dismantling the U.S.-centered world order. To rub it in, he is using Bush and Reagan-era Neocon arsonists, John Bolton and now Elliott Abrams, to fan the flames in Venezuela. It is almost like a black political comedy. The world of international diplomacy is being turned inside-out. A world where there is no longer even a pretense that we might adhere to international norms, let alone laws or treaties.

The Neocons who Trump has appointed are accomplishing what seemed unthinkable not long ago: Driving China and Russia together – the great nightmare of Henry Kissinger and Zbigniew Brzezinski. They also are driving Germany and other European countries into the Eurasian orbit, the "Heartland" nightmare of Halford Mackinder a century ago.

The root cause is clear: After the crescendo of pretenses and deceptions over Iraq, Libya and Syria, along with our absolution of the lawless regime of Saudi Arabia, foreign political leaders are coming to recognize what world-wide public opinion polls reported even before the Iraq/Iran-Contra boys turned their attention to the world's largest oil reserves in Venezuela: The United States is now the greatest threat to peace on the planet.

Calling the U.S. coup being sponsored in Venezuela a defense of democracy reveals the Doublethink underlying U.S. foreign policy. It defines "democracy" to mean supporting U.S. foreign policy, pursuing neoliberal privatization of public infrastructure, dismantling government regulation and following the direction of U.S.-dominated global institutions, from the IMF and World Bank to NATO. For decades, the resulting foreign wars, domestic austerity programs and military interventions have brought more violence, not democracy.

In the Devil's Dictionary that U.S. diplomats are taught to use as their "Elements of Style" guidelines for Doublethink, a "democratic" country is one that follows U.S. leadership and opens its economy to U.S. investment, and IMF- and World Bank-sponsored privatization. The Ukraine is deemed democratic, along with Saudi Arabia, Israel and other countries that act as U.S. financial and military protectorates and are willing to treat America's enemies are theirs too.

A point had to come where this policy collided with the self-interest of other nations, finally breaking through the public relations rhetoric of empire. Other countries are proceeding to de-dollarize and replace what U.S. diplomacy calls "internationalism" (meaning U.S. nationalism imposed on the rest of the world) with their own national self-interest.

This trajectory could be seen 50 years ago (I described it in Super Imperialism [1972] and Global Fracture [1978].) It had to happen. But nobody thought that the end would come in quite the way that is happening. History has turned into comedy, or at least irony as its dialectical path unfolds.

For the past half-century, U.S. strategists, the State Department and National Endowment for Democracy (NED) worried that opposition to U.S. financial imperialism would come from left-wing parties. It therefore spent enormous resources manipulating parties that called themselves socialist (Tony Blair's British Labour Party, France's Socialist Party, Germany's Social Democrats, etc.) to adopt neoliberal policies that were the diametric opposite to what social democracy meant a century ago. But U.S. political planners and Great Wurlitzer organists neglected the right wing, imagining that it would instinctively support U.S. thuggishness.

The reality is that right-wing parties want to get elected, and a populist nationalism is today's road to election victory in Europe and other countries just as it was for Donald Trump in 2016.

Trump's agenda may really be to break up the American Empire, using the old Uncle Sucker isolationist rhetoric of half a century ago. He certainly is going for the Empire's most vital organs. But it he a witting anti-American agent? He might as well be – but it would be a false mental leap to use "quo bono" to assume that he is a witting agent.

After all, if no U.S. contractor, supplier, labor union or bank will deal with him, would Vladimir Putin, China or Iran be any more naďve? Perhaps the problem had to erupt as a result of the inner dynamics of U.S.-sponsored globalism becoming impossible to impose when the result is financial austerity, waves of population flight from U.S.-sponsored wars, and most of all, U.S. refusal to adhere to the rules and international laws that it itself sponsored seventy years ago in the wake of World War II.

Dismantling International Law and Its Courts

Any international system of control requires the rule of law. It may be a morally lawless exercise of ruthless power imposing predatory exploitation, but it is still The Law. And it needs courts to apply it (backed by police power to enforce it and punish violators).

Here's the first legal contradiction in U.S. global diplomacy: The United States always has resisted letting any other country have any voice in U.S. domestic policies, law-making or diplomacy. That is what makes America "the exceptional nation." But for seventy years its diplomats have pretended that its superior judgment promoted a peaceful world (as the Roman Empire claimed to be), which let other countries share in prosperity and rising living standards.

At the United Nations, U.S. diplomats insisted on veto power. At the World Bank and IMF they also made sure that their equity share was large enough to give them veto power over any loan or other policy. Without such power, the United States would not join any international organization. Yet at the same time, it depicted its nationalism as protecting globalization and internationalism. It was all a euphemism for what really was unilateral U.S. decision-making.

Inevitably, U.S. nationalism had to break up the mirage of One World internationalism, and with it any thought of an international court. Without veto power over the judges, the U.S. never accepted the authority of any court, in particular the United Nations' International Court in The Hague. Recently that court undertook an investigation into U.S. war crimes in Afghanistan, from its torture policies to bombing of civilian targets such as hospitals, weddings and infrastructure. "That investigation ultimately found 'a reasonable basis to believe that war crimes and crimes against humanity." [1]

Donald Trump's National Security Adviser John Bolton erupted in fury, warning in September that: "The United States will use any means necessary to protect our citizens and those of our allies from unjust prosecution by this illegitimate court," adding that the UN International Court must not be so bold as to investigate "Israel or other U.S. allies."

That prompted a senior judge, Christoph Flügge from Germany, to resign in protest. Indeed, Bolton told the court to keep out of any affairs involving the United States, promising to ban the Court's "judges and prosecutors from entering the United States." As Bolton spelled out the U.S. threat: "We will sanction their funds in the U.S. financial system, and we will prosecute them in the U.S. criminal system. We will not cooperate with the ICC. We will provide no assistance to the ICC. We will not join the ICC. We will let the ICC die on its own. After all, for all intents and purposes, the ICC is already dead to us."

What this meant, the German judge spelled out was that: "If these judges ever interfere in the domestic concerns of the U.S. or investigate an American citizen, [Bolton] said the American government would do all it could to ensure that these judges would no longer be allowed to travel to the United States – and that they would perhaps even be criminally prosecuted."

The original inspiration of the Court – to use the Nuremburg laws that were applied against German Nazis to bring similar prosecution against any country or officials found guilty of committing war crimes – had already fallen into disuse with the failure to indict the authors of the Chilean coup, Iran-Contra or the U.S. invasion of Iraq for war crimes.

Dismantling Dollar Hegemony from the IMF to SWIFT

Of all areas of global power politics today, international finance and foreign investment have become the key flashpoint. International monetary reserves were supposed to be the most sacrosanct, and international debt enforcement closely associated.

Central banks have long held their gold and other monetary reserves in the United States and London. Back in 1945 this seemed reasonable, because the New York Federal Reserve Bank (in whose basement foreign central bank gold was kept) was militarily safe, and because the London Gold Pool was the vehicle by which the U.S. Treasury kept the dollar "as good as gold" at $35 an ounce. Foreign reserves over and above gold were kept in the form of U.S. Treasury securities, to be bought and sold on the New York and London foreign-exchange markets to stabilize exchange rates. Most foreign loans to governments were denominated in U.S. dollars, so Wall Street banks were normally name as paying agents.

That was the case with Iran under the Shah, whom the United States had installed after sponsoring the 1953 coup against Mohammed Mosaddegh when he sought to nationalize Anglo-Iranian Oil (now British Petroleum) or at least tax it. After the Shah was overthrown, the Khomeini regime asked its paying agent, the Chase Manhattan bank, to use its deposits to pay its bondholders. At the direction of the U.S. Government Chase refused to do so. U.S. courts then declared Iran to be in default, and froze all its assets in the United States and anywhere else they were able.

This showed that international finance was an arm of the U.S. State Department and Pentagon. But that was a generation ago, and only recently did foreign countries begin to feel queasy about leaving their gold holdings in the United States, where they might be grabbed at will to punish any country that might act in ways that U.S. diplomacy found offensive. So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. U.S. officials pretended to feel shocked at the insult that it might do to a civilized Christian country what it had done to Iran, and Germany agreed to slow down the transfer.

But then came Venezuela. Desperate to spend its gold reserves to provide imports for its economy devastated by U.S. sanctions – a crisis that U.S. diplomats blame on "socialism," not on U.S. political attempts to "make the economy scream" (as Nixon officials said of Chile under Salvador Allende) – Venezuela directed the Bank of England to transfer some of its $11 billion in gold held in its vaults and those of other central banks in December 2018. This was just like a bank depositor would expect a bank to pay a check that the depositor had written.

England refused to honor the official request, following the direction of Bolton and U.S. Secretary of State Michael Pompeo. As Bloomberg reported: "The U.S. officials are trying to steer Venezuela's overseas assets to [Chicago Boy Juan] Guaido to help bolster his chances of effectively taking control of the government. The $1.2 billion of gold is a big chunk of the $8 billion in foreign reserves held by the Venezuelan central bank."

Turkey seemed to be a likely destination, prompting Bolton and Pompeo to warn it to desist from helping Venezuela, threatening sanctions against it or any other country helping Venezuela cope with its economic crisis. As for the Bank of England and other European countries, the Bloomberg report concluded: "Central bank officials in Caracas have been ordered to no longer try contacting the Bank of England. These central bankers have been told that Bank of England staffers will not respond to them."

This led to rumors that Venezuela was selling 20 tons of gold via a Russian Boeing 777 – some $840 million. The money probably would have ended up paying Russian and Chinese bondholders as well as buying food to relieve the local famine. [4] Russia denied this report, but Reuters has confirmed is that Venezuela has sold 3 tons of a planned 29 tones of gold to the United Arab Emirates, with another 15 tones are to be shipped on Friday, February 1. [5] The U.S. Senate's Batista-Cuban hardliner Rubio accused this of being "theft," as if feeding the people to alleviate the U.S.-sponsored crisis was a crime against U.S. diplomatic leverage.

If there is any country that U.S. diplomats hate more than a recalcitrant Latin American country, it is Iran. President Trump's breaking of the 2015 nuclear agreements negotiated by European and Obama Administration diplomats has escalated to the point of threatening Germany and other European countries with punitive sanctions if they do not also break the agreements they have signed. Coming on top of U.S. opposition to German and other European importing of Russian gas, the U.S. threat finally prompted Europe to find a way to defend itself.

Imperial threats are no longer military. No country (including Russia or China) can mount a military invasion of another major country. Since the Vietnam Era, the only kind of war a democratically elected country can wage is atomic, or at least heavy bombing such as the United States has inflicted on Iraq, Libya and Syria. But now, cyber warfare has become a way of pulling out the connections of any economy. And the major cyber connections are financial money-transfer ones, headed by SWIFT, the acronym for the Society for Worldwide Interbank Financial Telecommunication, which is centered in Belgium.

Russia and China have already moved to create a shadow bank-transfer system in case the United States unplugs them from SWIFT. But now, European countries have come to realize that threats by Bolton and Pompeo may lead to heavy fines and asset grabs if they seek to continue trading with Iran as called for in the treaties they have negotiated.

On January 31 the dam broke with the announcement that Europe had created its own bypass payments system for use with Iran and other countries targeted by U.S. diplomats. Germany, France and even the U.S. poodle Britain joined to create INSTEX -- Instrument in Support of Trade Exchanges. The promise is that this will be used only for "humanitarian" aid to save Iran from a U.S.-sponsored Venezuela-type devastation. But in view of increasingly passionate U.S. opposition to the Nord Stream pipeline to carry Russian gas, this alternative bank clearing system will be ready and able to become operative if the United States tries to direct a sanctions attack on Europe.

I have just returned from Germany and seen a remarkable split between that nation's industrialists and their political leadership. For years, major companies have seen Russia as a natural market, a complementary economy needing to modernize its manufacturing and able to supply Europe with natural gas and other raw materials. America's New Cold War stance is trying to block this commercial complementarity. Warning Europe against "dependence" on low-price Russian gas, it has offered to sell high-priced LNG from the United States (via port facilities that do not yet exist in anywhere near the volume required). President Trump also is insisting that NATO members spend a full 2 percent of their GDP on arms – preferably bought from the United States, not from German or French merchants of death.

The U.S. overplaying its position is leading to the Mackinder-Kissinger-Brzezinski Eurasian nightmare that I mentioned above. In addition to driving Russia and China together, U.S. diplomacy is adding Europe to the heartland, independent of U.S. ability to bully into the state of dependency toward which American diplomacy has aimed to achieve since 1945.

The World Bank, for instance, traditionally has been headed by a U.S. Secretary of Defense. Its steady policy since its inception is to provide loans for countries to devote their land to export crops instead of giving priority to feeding themselves. That is why its loans are only in foreign currency, not in the domestic currency needed to provide price supports and agricultural extension services such as have made U.S. agriculture so productive. By following U.S. advice, countries have left themselves open to food blackmail – sanctions against providing them with grain and other food, in case they step out of line with U.S. diplomatic demands.

It is worthwhile to note that our global imposition of the mythical "efficiencies" of forcing Latin American countries to become plantations for export crops like coffee and bananas rather than growing their own wheat and corn has failed catastrophically to deliver better lives, especially for those living in Central America. The "spread" between the export crops and cheaper food imports from the U.S. that was supposed to materialize for countries following our playbook failed miserably – witness the caravans and refugees across Mexico. Of course, our backing of the most brutal military dictators and crime lords has not helped either.

Likewise, the IMF has been forced to admit that its basic guidelines were fictitious from the beginning. A central core has been to enforce payment of official inter-government debt by withholding IMF credit from countries under default. This rule was instituted at a time when most official inter-government debt was owed to the United States. But a few years ago Ukraine defaulted on $3 billion owed to Russia. The IMF said, in effect, that Ukraine and other countries did not have to pay Russia or any other country deemed to be acting too independently of the United States. The IMF has been extending credit to the bottomless it of Ukrainian corruption to encourage its anti-Russian policy rather than standing up for the principle that inter-government debts must be paid.

It is as if the IMF now operates out of a small room in the basement of the Pentagon in Washington. Europe has taken notice that its own international monetary trade and financial linkages are in danger of attracting U.S. anger. This became clear last autumn at the funeral for George H. W. Bush, when the EU's diplomat found himself downgraded to the end of the list to be called to his seat. He was told that the U.S. no longer considers the EU an entity in good standing. In December, "Mike Pompeo gave a speech on Europe in Brussels -- his first, and eagerly awaited -- in which he extolled the virtues of nationalism, criticised multilateralism and the EU, and said that "international bodies" which constrain national sovereignty "must be reformed or eliminated." [5]

Most of the above events have made the news in just one day, January 31, 2019. The conjunction of U.S. moves on so many fronts, against Venezuela, Iran and Europe (not to mention China and the trade threats and moves against Huawei also erupting today) looks like this will be a year of global fracture.

It is not all President Trump's doing, of course. We see the Democratic Party showing the same colors. Instead of applauding democracy when foreign countries do not elect a leader approved by U.S. diplomats (whether it is Allende or Maduro), they've let the mask fall and shown themselves to be the leading New Cold War imperialists. It's now out in the open. They would make Venezuela the new Pinochet-era Chile. Trump is not alone in supporting Saudi Arabia and its Wahabi terrorists acting, as Lyndon Johnson put it, "Bastards, but they're our bastards."

Where is the left in all this? That is the question with which I opened this article. How remarkable it is that it is only right-wing parties, Alternative for Deutschland (AFD), or Marine le Pen's French nationalists and those of other countries that are opposing NATO militarization and seeking to revive trade and economic links with the rest of Eurasia.

The end of our monetary imperialism, about which I first wrote in 1972 in Super Imperialism, stuns even an informed observer like me. It took a colossal level of arrogance, short-sightedness and lawlessness to hasten its decline -- something that only crazed Neocons like John Bolton, Elliot Abrams and Mike Pompeo could deliver for Donald Trump.

Footnotes

[1] "It Can't be Fixed: Senior ICC Judge Quits in Protest of US, Turkish Meddling," January 31, 2019.

[2] Patricia Laya, Ethan Bronner and Tim Ross, "Maduro Stymied in Bid to Pull $1.2 Billion of Gold From U.K.," Bloomberg, January 25, 2019. Anticipating just such a double-cross, President Chavez acted already in 2011 to repatriate 160 tons of gold to Caracas from the United States and Europe.

[3] ibid

[4] Corina Pons, Mayela Armas, "Exclusive: Venezuela plans to fly central bank gold reserves to UAE – source," Reuters, January 31, 2019.

[5] Constanze Stelzenmüller, "America's policy on Europe takes a nationalist turn," Financial Times, January 31, 2019.

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is "and forgive them their debts": Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year< Jointly posted with Hudson's website


doug , February 1, 2019 at 8:03 am

We see the Democratic Party showing the same colors. Yes we do. no escape? that I see

drumlin woodchuckles , February 1, 2019 at 9:43 am

Well, if the StormTrumpers can tear down all the levers and institutions of international US dollar strength, perhaps they can also tear down all the institutions of Corporate Globalonial Forced Free Trade. That itself may BE our escape . . . if there are enough millions of Americans who have turned their regionalocal zones of habitation into economically and politically armor-plated Transition Towns, Power-Down Zones, etc. People and places like that may be able to crawl up out of the rubble and grow and defend little zones of semi-subsistence survival-economics.

If enough millions of Americans have created enough such zones, they might be able to link up with eachother to offer hope of a movement to make America in general a semi-autarchik, semi-secluded and isolated National Survival Economy . . . . much smaller than today, perhaps likelier to survive the various coming ecosystemic crash-cramdowns, and no longer interested in leading or dominating a world that we would no longer have the power to lead or dominate.

We could put an end to American Exceptionalism. We could lay this burden down. We could become American Okayness Ordinarians. Make America an okay place for ordinary Americans to live in.

drumlin woodchuckles , February 1, 2019 at 2:27 pm

I read somewhere that the Czarist Imperial Army had a saying . . . "Quantity has a Quality all its own".

... ... ...

Cal2 , February 1, 2019 at 2:54 pm

Drumlin,

If Populists, I assume that's what you mean by "Storm Troopers", offer me M4A and revitalized local economies, and deliver them, they have my support and more power to them.

That's why Trump was elected, his promises, not yet delivered, were closer to that then the Democrats' promises. If the Democrats promised those things and delivered, then they would have my support.

If the Democrats run a candidate, who has a no track record of delivering such things, we stay home on election day. Trump can have it, because it won't be any worse.

I don't give a damn about "social issues." Economics, health care and avoiding WWIII are what motivates my votes, and I think more and more people are going to vote the same way.

drumlin woodchuckles , February 1, 2019 at 8:56 pm

Good point about Populist versus StormTrumper. ( And by the way, I said StormTRUMper, not StormTROOper). I wasn't thinking of the Populists. I was thinking of the neo-etc. vandals and arsonists who want us to invade Venezuela, leave the JCPOA with Iran, etc. Those are the people who will finally drive the other-country governments into creating their own parallel payment systems, etc.

And the midpoint of those efforts will leave wreckage and rubble for us to crawl up out of. But we will have a chance to crawl up out of it.

My reason for voting for Trump was mainly to stop the Evil Clinton from getting elected and to reduce the chance of near immediate thermonuclear war with Russia and to save the Assad regime in Syria from Clintonian overthrow and replacement with an Islamic Emirate of Jihadistan.

Much of what will be attempted " in Trump's name" will be de-regulationism of all kinds delivered by the sorts of basic Republicans selected for the various agencies and departments by Pence and Moore and the Koch Brothers. I doubt the Populist Voters wanted the Koch-Pence agenda. But that was a risky tradeoff in return for keeping Clinton out of office.

The only Dems who would seek what you want are Sanders or maybe Gabbard or just barely Warren. The others would all be Clinton or Obama all over again.

Quanka , February 1, 2019 at 8:29 am

I couldn't really find any details about the new INSTEX system – have you got any good links to brush up on? I know they made an announcement yesterday but how long until the new payment system is operational?

The Rev Kev , February 1, 2019 at 8:43 am

Here is a bit more info on it but Trump is already threatening Europe if they use it. That should cause them to respect him more:

https://www.dw.com/en/instex-europe-sets-up-transactions-channel-with-iran/a-47303580

LP , February 1, 2019 at 9:14 am

The NYT and other have coverage.

https://www.google.com/amp/s/www.nytimes.com/2019/01/31/world/europe/europe-trade-iran-nuclear-deal.amp.html

Louis Fyne , February 1, 2019 at 8:37 am

arguably wouldn't it be better if for USD hegemony to be dismantled? A strong USD hurts US exports, subsidizes American consumption (by making commodities cheaper in relative terms), makes international trade (aka a 8,000-mile+ supply chain) easier.

For the sake of the environment, you want less of all three. Though obviously I don't like the idea of expensive gasoline, natural gas or tube socks either.

Mel , February 1, 2019 at 9:18 am

It would be good for Americans, but the wrong kind of Americans. For the Americans that would populate the Global Executive Suite, a strong US$ means that the stipends they would pay would be worth more to the lackeys, and command more influence.

Dumping the industrial base really ruined things. America is now in a position where it can shout orders, and drop bombs, but doesn't have the capacity to do anything helpful. They have to give up being what Toynbee called a creative minority, and settle for being a dominant minority.

integer , February 1, 2019 at 8:43 am

Having watched the 2016 election closely from afar, I was left with the impression that many of the swing voters who cast their vote for Trump did so under the assumption that he would act as a catalyst for systemic change.

What this change would consist of, and how it would manifest, remained an open question. Would he pursue rapprochement with Russia and pull troops out of the Middle East as he claimed to want to do during his 2016 campaign, would he doggedly pursue corruption charges against Clinton and attempt to reform the FBI and CIA, or would he do both, neither, or something else entirely?

Now we know. He has ripped the already transparent mask of altruism off what is referred to as the U.S.-led liberal international order and revealed its true nature for all to see, and has managed to do it in spite of the liberal international establishment desperately trying to hold it in place in the hope of effecting a seamless post-Trump return to what they refer to as "norms". Interesting times.

James , February 1, 2019 at 10:34 am

Exactly. He hasn't exactly lived up to advanced billing so far in all respects, but I suspect there's great deal of skulduggery going on behind the scenes that has prevented that. Whether or not he ever had or has a coherent plan for the havoc he has wrought, he has certainly been the agent for change many of us hoped he would be, in stark contrast to the criminal duopoly parties who continue to oppose him, where the daily no news is always bad news all the same. To paraphrase the infamous Rummy, you don't go to war with the change agent and policies you wished you had, you go to war with the ones you have. That might be the best thing we can say about Trump after the historic dust of his administration finally settles.

drumlin woodchuckles , February 1, 2019 at 2:39 pm

Look on some bright sides. Here is just one bright side to look on. President Trump has delayed and denied the Clinton Plan to topple Assad just long enough that Russia has been able to help Assad preserve legitimate government in most of Syria and defeat the Clinton's-choice jihadis.

That is a positive good. Unless you are pro-jihadi.

integer , February 1, 2019 at 8:09 pm

Clinton wasn't going to "benefit the greater good" either, and a very strong argument, based on her past behavior, can be made that she represented the greater threat. Given that the choice was between her and Trump, I think voters made the right decision.

Stephen Gardner , February 1, 2019 at 9:02 am

Excellent article but I believe the expression is "cui bono": who benefits.

hemeantwell , February 1, 2019 at 9:09 am

Hudson's done us a service in pulling these threads together. I'd missed the threats against the ICC judges. One question: is it possible for INSTEX-like arrangements to function secretly? What is to be gained by announcing them publicly and drawing the expected attacks? Does that help sharpen conflicts, and to what end?

Oregoncharles , February 1, 2019 at 3:23 pm

Maybe they're done in secret already – who knows? The point of doing it publicly is to make a foreign-policy impact, in this case withdrawing power from the US. It's a Declaration of Independence.

whine country , February 1, 2019 at 9:15 am

It certainly seems as though the 90 percent (plus) are an afterthought in this journey to who knows where? Like George C.Scott said while playing Patton, "The whole world at economic war and I'm not part of it. God will not let this happen." Looks like we're on the Brexit track (without the vote). The elite argue with themselves and we just sit and watch. It appears to me that the elite just do not have the ability to contemplate things beyond their own narrow self interest. We are all deplorables now.

a different chris , February 1, 2019 at 9:30 am

Unfortunately this

The end of America's unchallenged global economic dominance has arrived sooner than expected

Is not supported by this (or really the rest of the article). The past tense here, for example, is unwarranted:

At the United Nations, U.S. diplomats insisted on veto power. At the World Bank and IMF they also made sure that their equity share was large enough to give them veto power over any loan or other policy.

And this

So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. Germany agreed to slow down the transfer.

Doesn't show Germany as breaking free at all, and worse it is followed by the pregnant

But then came Venezuela.

Yet we find out that Venezuela didn't managed to do what they wanted to do, the Europeans, the Turks, etc bent over yet again. Nothing to see here, actually.

So what I'm saying is he didn't make his point. I wish it were true. But a bit of grumbling and (a tiny amount of) foot-dragging by some pygmy leaders (Merkel) does not signal a global change.

orange cats , February 1, 2019 at 11:22 am

"So what I'm saying is he didn't make his point. I wish it were true. But a bit of grumbling and (a tiny amount of) foot-dragging by some pygmy leaders (Merkel) does not signal a global change."

I'm surprised more people aren't recognizing this. I read the article waiting in vain for some evidence of "the end of our monetary imperialism" besides some 'grumbling and foot dragging' as you aptly put it. There was some glimmer of a buried lede with INTEX, created to get around U.S. sanctions against Iran ─ hardly a 'dam-breaking'. Washington is on record as being annoyed.

OpenThePodBayDoorsHAL , February 1, 2019 at 1:41 pm

Currency regime change can take decades, and small percentage differences are enormous because of the flows involved. USD as reserve for 61% of global sovereigns versus 64% 15 years ago is a massive move. World bond market flows are 10X the size of world stock market flows even though the price of the Dow and Facebook shares etc get all of the headlines.

And foreign exchange flows are 10-50X the flows of bond markets, they're currently on the order of $5 *trillion* per day. And since forex is almost completely unregulated it's quite difficult to get the data and spot reserve currency trends. Oh, and buy gold. It's the only currency that requires no counterparty and is no one's debt obligation.

orange cats , February 1, 2019 at 3:47 pm

That's not what Hudson claims in his swaggering final sentence:

"The end of our monetary imperialism, about which I first wrote in 1972 in Super Imperialism, stuns even an informed observer like me."

Which is risible as not only did he fail to show anything of the kind, his opening sentence stated a completely different reality: "The end of America's unchallenged global economic dominance has arrived sooner than expected" So if we hold him to his first declaration, his evidence is feeble, as I mentioned. As a scholar, his hyperbole is untrustworthy.

No, gold is pretty enough lying on the bosom of a lady-friend but that's about its only usefulness in the real world.

skippy , February 1, 2019 at 8:09 pm

Always bemusing that gold bugs never talk about gold being in a bubble . yet when it goes south of its purchase price speak in tongues about ev'bal forces.

timbers , February 1, 2019 at 12:26 pm

I don't agree, and do agree. The distinction is this:

If you fix a few of Hudson's errors, and take him as making the point that USD is losing it's hegemony, IMO he is basically correct.

Brian (another one they call) , February 1, 2019 at 9:56 am

thanks Mr. Hudson. One has to wonder what has happened when the government (for decades) has been shown to be morally and otherwise corrupt and self serving. It doesn't seem to bother anyone but the people, and precious few of them. Was it our financial and legal bankruptcy that sent us over the cliff?

Steven , February 1, 2019 at 10:23 am

Great stuff!

Indeed! It is to say the least encouraging to see Dr. Hudson return so forcefully to the theme of 'monetary imperialism'. I discovered his Super Imperialism while looking for an explanation for the pending 2003 US invasion of Iraq. If you haven't read it yet, move it to the top of your queue if you want to have any idea of how the world really works. You can find any number of articles on his web site that return periodically to the theme of monetary imperialism. I remember one in particular that described how the rest of the world was brought on board to help pay for its good old-fashioned military imperialism.

If it isn't clear to the rest of the world by now, it never will be. The US is incapable of changing on its own a corrupt status quo dominated by a coalition of its military industrial complex, Wall Street bankers and fossil fuels industries. As long as the world continues to chase the debt created on the keyboards of Wall Street banks and 'deficits don't matter' Washington neocons – as long as the world's 1% think they are getting 'richer' by adding more "debts that can't be repaid (and) won't be" to their portfolios, the global economy can never be put on a sustainable footing.

Until the US returns to the path of genuine wealth creation, it is past time for the rest of the world to go its own way with its banking and financial institutions.

Oh , February 1, 2019 at 3:52 pm

The use of the stick will only go so far. What's the USG going to do if they refuse?

Summer , February 1, 2019 at 10:46 am

In other words, after 2 World Wars that produced the current world order, it is still in a state of insanity with the same pretensions to superiority by the same people, to get number 3.

Yikes , February 1, 2019 at 12:07 pm

UK withholding Gold may start another Brexit? IE: funds/gold held by BOE for other countries in Africa, Asian, South America, and the "stans" with start to depart, slowly at first, perhaps for Switzerland?

Ian Perkins , February 1, 2019 at 12:21 pm

Where is the left in all this? Pretty much the same place as Michael Hudson, I'd say. Where is the US Democratic Party in all this? Quite a different question, and quite a different answer. So far as I can see, the Democrats for years have bombed, invaded and plundered other countries 'for their own good'. Republicans do it 'for the good of America', by which the ignoramuses mean the USA. If you're on the receiving end, it doesn't make much difference.

Michael A Gualario , February 1, 2019 at 12:49 pm

Agreed! South America intervention and regime change, Syria ( Trump is pulling out), Iraq, Middle East meddling, all predate Trump. Bush, Clinton and Obama have nothing to do with any of this.

Oregoncharles , February 1, 2019 at 2:12 pm

" So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. "

What proof is there that the gold is still there? Chances are it's notional. All Germany, Venezuela, or the others have is an IOU – and gold cannot be printed. Incidentally, this whole discussion means that gold is still money and the gold standard still exists.

Oregoncharles , February 1, 2019 at 3:41 pm

Wukchumni beat me to the suspicion that the gold isn't there.

The Rev Kev , February 1, 2019 at 7:40 pm

What makes you think that the gold in Fort Knox is still there? If I remember right, there was a Potemkin visit back in the 70s to assure everyone that the gold was still there but not since then. Wait, I tell a lie. There was another visit about two years ago but look who was involved in that visit-

https://www.whas11.com/article/news/local/after-40-years-fort-knox-opens-vault-to-civilians/466441331

And I should mention that it was in the 90s that between 1.3 and 1.5 million 400 oz tungsten blanks were manufactured in the US under Clinton. Since then gold-coated tungsten bars have turned up in places like Germany, China, Ethiopia, the UK, etc so who is to say if those gold bars in Fort Knox are gold all the way through either. More on this at -- http://viewzone2.com/fakegoldx.html

Summer , February 1, 2019 at 5:44 pm

A non-accountable standard. It's more obvious BS than what is going on now.

jochen , February 2, 2019 at 6:46 am

It wasn't last year that Germany brought back its Gold. It has been ongoing since 2013, after some political and popular pressure build up. They finished the transaction in 2017. According to an article in Handelblatt (but it was widely reported back then) they brought back pretty much everything they had in Paris (347t), left what they had in London (perhaps they should have done it in reverse) and took home another 300t from the NY Fed. That still leaves 1236t in NY. But half of their Gold (1710t) is now in Frankfurt. That is 50% of the Bundesbanks holdings.

They made a point in saying that every bar was checked and weighed and presented some bars in Frankfurt. I guess they didn't melt them for assaying, but I'd expect them to be smart enough to check the density.

Their reason to keep Gold in NY and London is to quickly buy USD in case of a crisis. That's pretty much a cold war plan, but that's what they do right now.

Regarding Michal Hudsons piece, I enjoyed reading through this one. He tends to write ridiculously long articles and in the last few years with less time and motivation at hand I've skipped most of his texts on NC as they just drag on.

When I'm truly fascinated I like well written, long articles but somehow he lost me at some point. But I noticed that some long original articles in US magazines, probably research for a long time by the journalist, can just drag on for ever as well I just tune out.

Susan the Other , February 1, 2019 at 2:19 pm

This is making sense. I would guess that tearing up the old system is totally deliberate. It wasn't working so well for us because we had to practice too much social austerity, which we have tried to impose on the EU as well, just to stabilize "king dollar" – otherwise spread so thin it was a pending catastrophe.

Now we can get out from under being the reserve currency – the currency that maintains its value by financial manipulation and military bullying domestic deprivation. To replace this old power trip we are now going to mainline oil. The dollar will become a true petro dollar because we are going to commandeer every oil resource not already nailed down.

When we partnered with SA in Aramco and the then petro dollar the dollar was only backed by our military. If we start monopolizing oil, the actual commodity, the dollar will be an apex competitor currency without all the foreign military obligations which will allow greater competitive advantages.

No? I'm looking at PdVSA, PEMEX and the new "Energy Hub for the Eastern Mediterranean" and other places not yet made public. It looks like a power play to me, not a hapless goofball president at all.

skippy , February 2, 2019 at 2:44 am

So sand people with sociological attachment to the OT is a compelling argument based on antiquarian preferences with authoritarian patriarchal tendencies for their non renewable resource . after I might add it was deemed a strategic concern after WWII .

Considering the broader geopolitical realities I would drain all the gold reserves to zero if it was on offer . here natives have some shiny beads for allowing us to resource extract we call this a good trade you maximize your utility as I do mine .

Hay its like not having to run C-corp compounds with western 60s – 70s esthetics and letting the locals play serf, blow back pay back, and now the installed local chiefs can own the risk and refocus the attention away from the real antagonists.

ChrisAtRU , February 1, 2019 at 6:02 pm

Indeed. Thanks so much for this. Maybe the RICS will get serious now – can no longer include Brazil with Bolsonaro. There needs to be an alternate system or systems in place, and to see US Imperialism so so blatantly and bluntly by Trump admin – "US gives Juan Guaido control over some Venezuelan assets" – should sound sirens on every continent and especially in the developing world. I too hope there will be fracture to the point of breakage. Countries of the world outside the US/EU/UK/Canada/Australia confraternity must now unite to provide a permanent framework outside the control of imperial interests. The be clear, this must not default to alternative forms of imperialism germinating by the likes of China.

mikef , February 1, 2019 at 6:07 pm

" such criticism can't begin to take in the full scope of the damage the Trump White House is inflicting on the system of global power Washington built and carefully maintained over those 70 years. Indeed, American leaders have been on top of the world for so long that they no longer remember how they got there.

Few among Washington's foreign policy elite seem to fully grasp the complex system that made U.S. global power what it now is, particularly its all-important geopolitical foundations. As Trump travels the globe, tweeting and trashing away, he's inadvertently showing us the essential structure of that power, the same way a devastating wildfire leaves the steel beams of a ruined building standing starkly above the smoking rubble."

http://www.tomdispatch.com/blog/176373/tomgram%3A_alfred_mccoy%2C_tweeting_while_rome_burns

Rajesh K , February 1, 2019 at 7:23 pm

I read something like this and I am like, some of these statements need to be qualified. Like: "Driving China and Russia together". Like where's the proof? Is Xi playing telephone games more often now with Putin? I look at those two and all I see are two egocentric people who might sometimes say the right things but in general do not like the share the spotlight. Let's say they get together to face America and for some reason the later gets "defeated", it's not as if they'll kumbaya together into the night.

This website often points out the difficulties in implementing new banking IT initiatives. Ok, so Europe has a new "payment system". Has it been tested thoroughly? I would expect a couple of weeks or even months of chaos if it's not been tested, and if it's thorough that probably just means that it's in use right i.e. all the kinks have been worked out. In that case the transition is already happening anyway. But then the next crisis arrives and then everyone would need their dollar swap lines again which probably needs to cleared through SWIFT or something.

Anyway, does this all mean that one day we'll wake up and a slice of bacon is 50 bucks as opposed to the usual 1 dollar?

Keith Newman , February 2, 2019 at 1:12 am

Driving Russia and China together is correct. I recall them signing a variety of economic and military agreement a few years ago. It was covered in the media. You should at least google an issue before making silly comments. You might start with the report of Russia and China signing 30 cooperation agreements three years ago. See https://www.rbth.com/international/2016/06/27/russia-china-sign-30-cooperation-agreements_606505 . There are lots and lots of others.

RBHoughton , February 1, 2019 at 9:16 pm

He's draining the swamp in an unpredicted way, a swamp that's founded on the money interest. I don't care what NYT and WaPo have to say, they are not reporting events but promoting agendas.

skippy , February 2, 2019 at 1:11 am

The financial elites are only concerned about shaping society as they see fit, side of self serving is just a historical foot note, Trumps past indicates a strong preference for even more of the same through authoritarian memes or have some missed the OT WH reference to dawg both choosing and then compelling him to run.

Whilst the far right factions fight over the rudder the only new game in town is AOC, Sanders, Warren, et al which Trumps supporters hate with Ideological purity.

/lasse , February 2, 2019 at 7:50 am

Highly doubt Trump is a "witting agent", most likely is that he is just as ignorant as he almost daily shows on twitter. On US role in global affairs he says the same today as he did as a media celebrity in the late 80s. Simplistic household "logics" on macroeconomics. If US have trade deficit it loses. Countries with surplus are the winners.

On a household level it fits, but there no "loser" household that in infinity can print money that the "winners" can accumulate in exchange for their resources and fruits of labor.

One wonder what are Trumps idea of US being a winner in trade (surplus)? I.e. sending away their resources and fruits of labor overseas in exchange for what? A pile of USD? That US in the first place created out of thin air. Or Chinese Yuan, Euros, Turkish liras? Also fiat-money. Or does he think US trade surplus should be paid in gold?

When the US political and economic hegemony will unravel it will come "unexpected". Trump for sure are undermining it with his megalomaniac ignorance. But not sure it's imminent.

Anyhow frightening, the US hegemony have its severe dark sides. But there is absolutely nothing better on the horizon, a crash will throw the world in turmoil for decades or even a century. A lot of bad forces will see their chance to elevate their influence. There will be fierce competition to fill the gap.

On could the insane economic model of EU/Germany being on top of global affairs, a horribly frightening thought. Misery and austerity for all globally, a permanent recession. Probably not much better with the Chinese on top. I'll take the USD hegemony any day compared to that prospect.

Sound of the Suburbs , February 2, 2019 at 10:26 am

Former US ambassador, Chas Freeman, gets to the nub of the problem. "The US preference for governance by elected and appointed officials, uncontaminated by experience in statecraft and diplomacy, or knowledge of geography, history and foreign affairs" https://www.youtube.com/watch?annotation_id=annotation_882041135&feature=iv&src_vid=Ge1ozuXN7iI&v=gkf2MQdqz-o

Sound of the Suburbs , February 2, 2019 at 10:29 am

When the delusion takes hold, it is the beginning of the end.

The British Empire will last forever
The thousand year Reich
American exceptionalism

As soon as the bankers thought they thought they were "Master of the Universe" you knew 2008 was coming. The delusion had taken hold.

Sound of the Suburbs , February 2, 2019 at 10:45 am

Michael Hudson, in Super Imperialism, went into how the US could just create the money to run a large trade deficit with the rest of the world. It would get all these imports effectively for nothing, the US's exorbitant privilege. I tied this in with this graph from MMT.

This is the US (46.30 mins.) https://www.youtube.com/watch?v=ba8XdDqZ-Jg

The trade deficit required a large Government deficit to cover it and the US government could just create the money to cover it.

Then ideological neoliberals came in wanting balanced budgets and not realising the Government deficit covered the trade deficit.

The US has been destabilising its own economy by reducing the Government deficit. Bill Clinton didn't realize a Government surplus is an indicator a financial crisis is about to hit. The last US Government surplus occurred in 1927 – 1930, they go hand-in-hand with financial crises.

Richard Koo shows the graph central bankers use and it's the flow of funds within the economy, which sums to zero (32-34 mins.).

https://www.youtube.com/watch?v=8YTyJzmiHGk

The Government was running a surplus as the economy blew up in the early 1990s. It's the positive and negative, zero sum, nature of the monetary system. A big trade deficit needs a big Government deficit to cover it. A big trade deficit, with a balanced budget, drives the private sector into debt and blows up the economy.

skippy , February 2, 2019 at 5:28 pm

It should be remembered Bill Clinton's early meeting with Rubin, where in he was informed that wages and productivity had diverged – Rubin did not blink an eye.

[Jul 28, 2019] Supreme Court Ruling Will 'Really Accelerate' Border Wall Progress DHS Chief

Jul 28, 2019 | www.zerohedge.com

A Supreme Court decision to allow President Trump to redirect $2.5 billion in Pentagon funds towards his long promised border wall will "really accelerate" progress on the project, according to Acting DHS Secretary Kevin McAleenan in Sunday appearance on Fox News .

The 5-4 decision will allow for the construction of more than 100 miles of fencing - the most significant step yet, according to Bloomberg .

McAleenan said while the court's ruling was "a big victory" to build more of the wall, " we do remain in the midst of a border security crisis " with migrants flooding the region and that Congress must take more action to deter crossings.

"We made very clear the targeted changes in law that we need," McAleenan said. - Bloomberg

... ... ...

The wall segments in Arizona, New Mexico and California would give Trump a tangible achievement to tout in his re-election campaign. Until now, congressional and court resistance had thwarted significant progress toward a stronger barrier on the almost 2,000-mile frontier.

During his campaign, Trump said Mexico would pay for the wall. On Saturday he said the U.S. would be "fully reimbursed for this expenditure, over time, by other countries." He didn't say how. - Bloomberg

Drop-Hammer , 53 minutes ago link

'Accelerate border wall progress'-- give me a fuckin' break. Trump has had almost three years to secure the border but has done nothing but blame the Demotards and our ***-infested jewdiciary for why he can not perform his sworn constitutional duty as POTUS to protect our borders/citizens. Christ, he must think that he has to have their permission and go on bended knee before them with his begging bowl in hand. Trump is a god-damned waste. He is what he described politicians in his campaign-- All talk and no action.

I voted for the guy and supported him. I will not support him in the next go round. Time to get a fuckin' crazed loon Demotard in office to motivate us to cross the line and start the shootin'. I ain't gonna end up a slave to jews/niggers/beaners/muslims/hindus/illegal alien mudmen just because I am a normal Christian Heritage American white guy. **** that noise. I no longer slumber in The *** Matrix.

chubbar , 2 hours ago link

Trump should award contracts to 10 contractors and immediately disburse the funds so libtards can't stop the building.

100 miles isn't near enough and we've seen areas where replacement walls are being put up at over a mile a day by one contractor. He could get 10 contractors or more building a couple hundred miles a month. Trump needs to build faster!

[Jul 24, 2019] The Left Burns a Heretic Nancy Pelosi

Jul 24, 2019 | www.theamericanconservative.com

We might pause over those last two words, "true enemies," and make a larger point about the dynamic at play here. Politicos with an historical frame of reference look at a situation such as this -- when an ally is harshly scourged for not being allied enough -- and recall the distinction between "infidels" and "heretics."

In this reckoning, an infidel is someone who never believed what you believe. For instance, over much of the last 13 centuries, a Muslim might say of a Christian, "He's an infidel," and the Christian would say the same thing. On either side of such a divide, there can be plenty of hostility, yet it tends not to be personal -- after all, the infidel is a stranger.

By contrast, a heretic is someone who once believed the same thing you do, but now does not. And so heresy is more wounding, and threatening, because the heretic challenges one's innermost beliefs.

In history, civilizations have fought wars against infidels, sometimes wars of annihilation, yet even so, heretics are often treated worse, because there's that intense personal edge: you betrayed me . That's why civilizations have often launched inquisitions against heretics, cheerfully torturing them to get them to confess and recant -- and then killing them. For the orthodox believer, there's a grim logic here: the infidel is an external enemy to be opposed. But the heretic is an internal cancer to be eradicated.

Nowadays, America's politics isn't so vicious as, say, Europe's during the Thirty Years War. Yet still, in our time, we can see the infidels/heretics dichotomy: in the eyes of the Wokerati, Trump and the Republicans are infidels. Yes, they're the enemy, and so of course they must be crushed. Yet for the most part, it's nothing personal

[Jul 23, 2019] Jewish Women Suffer Under Israel's Theocracy by Malka Himelhoch

Jul 23, 2019 | blogs.timesofisrael.com

Last Monday, the Pew Research Center published a report classifying Israel as one of the 20 most religiously restrictive countries in the world, in the company of countries like Syria, Saudi Arabia, and Iran. While this might strike some as shocking, it doesn't surprise me at all.

In Israel, a majority of the citizens don't identify as religious, and yet every marriage, divorce, and Jewish conversion are under the exclusive jurisdiction of the Ultra-Orthodox Rabbinate. This means that every divorce must take place in accordance with the Ultra- Orthodox interpretation of Jewish Law. Anyone who is familiar with this interpretation of Jewish Law knows that it is extremely patriarchal, heavily favoring the rights and desires of men over those of women. This is also true in the realm of divorce. According to Jewish law, a divorce is only legal if a man freely and willingly grants his wife a bill of divorce. Until a man gives his wife a bill of divorce she has no choice but to remain married to him.

If you think that this sounds like a serious violation of basic civil freedoms, you're right. Not only is the lack of civil marriage an infringement on the freedom of Jewish Israelis to express their religion as they choose but more specifically the monopoly of the rabbinical courts on divorces in Israel represents an abuse of the freedoms of women. In Israel today 1 in 5 women involved in divorce cases are a gunot (women whose husbands are unable to give a writ of divorce because they are "missing," either physically or mentally) or m esoravot get (women whose husbands refuse to grant them divorces).

One woman, physically and emotionally abused by her husband, was told by the rabbinical court to book a hotel for the weekend in order to reconcile with her husband. Even though she had a restraining order against her husband and a social worker offered to testify to the abuse she had faced at the hands of her husband, the rabbinical judges refused to acknowledge that there was a legitimate reason for divorce and closed the case. Only after five and a half years, and a lengthy legal battle did she succeed in getting a divorce.

Another story is that of a woman trapped in a marriage to a man who after a head injury only has the mental capabilities of a three year old. When the rabbis asked him if he wanted to give his wife a divorce he keeps changing his mind, sometimes saying no and sometimes saying yes. The traditional methods used to convince a husband to give his wife a get are impossible to use in this situation because he is so disabled. The rabbinical court can't send him to prison, or confiscate his driver's license because he is mentally the equivalent of a child, so the case is stalled. She cannot get a divorce and the rabbinical court cannot help her.

I could go on and on.

Clearly even when there is no miscarriage of justice, divorce under Jewish law as interpreted in the rabbinic court is inherently biased against women...

Malka Himelhoch is a rising Junior at Princeton University and is interning this summer at Mavoi Satum.

[Jul 21, 2019] On the alleged Arendt´s banality of evil, well, some more evil than others, if not because of their clearly over the top ambitions

Notable quotes:
"... If you believe the US media if they just removed Putin, Russia would go back to being a good little puppet state just like under Yeltins. Which is a shockingly naïve way to look at international relations. ..."
"... It is not just Chinese but Asian in general. Watch several seasons of the Japanese cartoon "Gundam" and get back to me about who the good guys are and who the bad guys are in it. ..."
"... People always suffer when they allow corrupt sociopaths to gain power. That is as true today as it was in Germany in 1930's and 40's. ..."
"... According to news reports since the moron in charge announced that he had signed an executive order 'blacklisting' Huawei, those lovely humans at Google are denying Huawei phones access to gmail and playstore. The android operating system is open source and still available to Huawei. ..."
"... Doubtless FB and M$ will follow suit. Getting rid of all the nasty stuff that spies on users 24/7/365 now means that Huawei phones have all the advantages with none of the disadvantages. ..."
"... In Games of Thrones, the good characters are regularly disembowled, choked and drowned to death. Or turn evil. The evil characters grow in power and menace and rarely perish. The overwhelming message is that all people and all power are evil. There is no good in the world or what good there is will be quickly stomped out. Resistance is useless. ..."
"... The main message is really that resistance is futile . If the powers that be can condition the contemporary (and naturally idealistic) Western youth to accept that hypothesis, any threat to their depredations and financial tyranny is rendered impotent. If resistance is futile, said youth will simply have to accept how things are and try to stay out of the way of tyrannical kings, rapacious queens, brutal captains of the guards and wanton dragons. I.e. sit down and shut up while HRC, John Bolton, John Brennan and James Clapper ruin the planet. ..."
"... In the US 33% supported unilateral action, 70% of congress voted for the unilateral military action ..."
"... Thomas Jefferson said: "I tremble for my countrymen because I know God is just..." ..."
"... "The powerful do what they can and the weak suffer what they must." ..."
"... The movies Hollywood produced are often telling psychological conflicts as the central story. Each character has a certain fixed attitude and the interacting of the characters create the story. It does not matter if the setting is in antic times or in the far future. In the end there are always the bad and the good guy slamming it out in a fistfight. ..."
"... The historic Chinese drama which I currently favor are based on sociological storytelling. As they develop the stories form their characters. Their attitudes change over time because the developing exterior circumstances push them into certain directions. Good becomes bad and again good. The persons change because they must, not because the are genetically defined. I find these kind of movies more interesting. ..."
"... The take away quote "Wang also reiterated the principled stand against the "long-arm jurisdiction" imposed by the United States." Empire is having its hand slapped back in Venezuela, Iran, Syria, ??? ..."
"... I see empire as a war junkie and they are starting to twitch in withdrawals which is dangerous but a necessary stage. Trumps latest tweets show that level of energy. The spinning plates of empire are not wowing the crowds like before.....what is plan Z? ..."
"... My own view is that, as with everything the US has done lately, it already lost the war before it even stepped into battle in the theater. ..."
"... Strangest thing of all that the US itself would do the forcing out of itself from the world's trust. ..."
"... As I've written previously, the political philosophers of the nascent USA thought they would have a Natural Aristocracy ( here and here ) somewhat based on a meritocratic system instead of the Old World's Inherited Aristocracy based on blood relations and closed to anyone not within a very small circle. Yet it was still an Aristocracy with all it inherent evils, and it is that vast assortment of evils the US citizenry has yet to overcome in its supposed--idealized--quest for self-government. ..."
"... If you are interested in watching a film with a sociological approach to telling a story and you are close to a cinema, Mike Leigh's "Peterloo" just started screening last Thursday in Australia. The film is an exploration of British society during the Regency period (in the early 19th century), the class attitudes and opinions prevalent then, and the conditions and events that led to 60,000 - 100,000 labouring class people gathering at St Peter's Field in Manchester in August 1819, and how it was viciously broken up by cavalry and foot soldiers acting on orders of the aristocracy. ..."
"... The culture I am immersed in (USA) is heavily weighted toward the dramatic and two dimensional. Simply put, mass perspective engineering is geared to over simplify and reinforce these views with media imprinting via hollywood, madison ave. etc. The lenses through which impressions from the "outside world" pass through engineered to give the desired results rather than expand consciousness or engender critical thinking. In short, we are breeding for weakness and gullibility. ..."
"... If it is Hollywood, then you can be certain the intention is to manipulate the younger generation to supporting and idolising their permanent wars. On the face of it, that indeed appears to be the case. ..."
May 21, 2019 | www.moonofalabama.org

Oliver K , May 19, 2019 3:32:24 PM | 5

" Why The Takedown Of Heinz-Christian Strache Will Strengthen The Right | Main May 19, 2019 The story in the American Conservative is very weak: that "the Americans" have already won the war is just due to the built-in superiority: the "land of the free" against "communist dictatorship" (so everybody knows who has to win). Or, a variation, "free market" against "state-owned".

A typical statement of that article: "China views commercial relations with other countries as an extension of the political conflict between Western democracies and itself -- that is, an extension of war." -- a very defining element of the "American" character, to project the own aggression onto others.

There was another opinion-piece somewhere, can't find it anymore, where the author argued that hopefully that "trade-war" will do really good for the Chinese economy -- forget about the US, and develop the home market.

As I believe that the sanctions are a great gift to Russia, I also believe that this "trade-war" is a (potential) great gift to China.

Kadath , May 19, 2019 4:21:27 PM | 0

That was an interesting article on psychological vs sociological storytelling and it makes a good companion piece when thinking about how the US media personalizes US geo-political conflicts with the heads of rival state (Putin, Xi, Castro, Kim Jong-un, Khomeini, Gaddafi).

If you believe the US media if they just removed Putin, Russia would go back to being a good little puppet state just like under Yeltins. Which is a shockingly naïve way to look at international relations. States have permanent interests and any competent head of State will always represent those interests to the best of their ability. True, you could overthrow the government and replace every senior government figure with a compliant puppet (which the US always tries to do), but the permanent interests that arise from the inhabitants of the State will always rise up and (re)assert themselves. When the State leadership is bribed or threatened into ignoring or acting against these needs it ultimately creates a failed State.

Even the US media seems to subconsciously understand this, when they talk of "overly ambitious US goals of remaking societies", however, they never make the logical next step of investigating why these States do not wish to be remade as per the US imagined ideal, what the interests of these actually are and how diplomacy can resolve conflicts.

According to the US media everything boils down to the US = good, anyone who disagrees with our policies = bad and diplomacy is just a measure of how vulgar our threats are during talks. I'm specifically thinking of the US Ambassador to Russia, John Huntsman's boast of a US aircraft carrier in the Mediterranean as being 100,000 tons of diplomacy to Russia - of all the ridiculous and stupid things to says to Russia when supposedly trying to "ease" tensions (I still can't believe Huntsmen, former Ambassador to China under Obama, is regarded a "serious" professional ambassador within the State departments when compared to all the celebrity ambassadorships the US President for fundraiser).

KC , May 19, 2019 4:31:39 PM | 1
@WJ #8 - That's probably a daily occurrence there anyway.
KC , May 19, 2019 4:35:35 PM | 2
Somewhat on-topic, China's state media is broadcasting Anti-American movies .
William Gruff , May 19, 2019 4:43:17 PM | 4
Cresty @9

It is not just Chinese but Asian in general. Watch several seasons of the Japanese cartoon "Gundam" and get back to me about who the good guys are and who the bad guys are in it.

The whole notion that the "good guys" and the "bad guys" are set in stone is antithetical to any worldview founded in Buddhism/Confucianism, or influenced by the same. Can you imagine western children's programming teaching ambiguity between good and evil? That which is which depends upon the observer's perspective? This is the sort of concept that few western people get exposed to until graduate level ethics and philosophy courses.

Or maybe not. I have never seen a single episode of "Game of Thrones" and maybe that delves into ethical complexities that typical western mass media avoids. I wouldn't know. What I do know is that this moral and ethical complexity is something that most Asian children are introduced to before they hit their teens.

Kadath , May 19, 2019 4:59:33 PM | 5
Trump just tweeted "If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!". Needless to say, more ridiculousness, Trump is pretty close to plagiarizing himself with his prior comments regarding North Korean "North Korean Leader Kim Jong Un just stated that the "Nuclear Button is on his desk at all times." Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!". I think Trump is getting desperate now waiting by the phone for the Iranians to call him. Trump is certainly still smarting after the failed Venezuela coup and wants to avoid a second embarrassing defeat, however I doubt the Iranians will care that much about his latest threat by tweet.
Nemesiscalling , May 19, 2019 5:18:09 PM | 6
GOT was jarring this season. In the penultimate episode, a dragon wreaks havoc on a western capital city, brutally murdering most of its inhabitants.

It is impossible not to make the correlation of the dragon as China and kings landing (The city) as Washington d.c.

From this one can glean that they were attempting to show the ascendancy of China and the utter destruction of the U.S. With shades of gray thrown about as to if the people of the city deserved to be burned alive and as to whether the dragon and its rider, China, have become what they originally set out to vanquish. The old Nietzsche maxim...those who fight with monsters...

It was indeed unsettling because there are no moral winners. It is well realised for this reason but poorly written and produced in other aspects as noted above by other posters.

Sasha , May 19, 2019 5:26:49 PM | 7
On the alleged Arendt´s banality of evil, well, some more evil than others, if not because of their clearly over the top ambitions:

Interesting comment linking some sources and articles on US military strategy from decades ago , some of which I am not able to get to anymore, as the article at ICH numbered 3011:

"First published From Parameters, Summer 1997, pp. 4-14: US Army War College: "There will be no peace. At any given moment for the rest of our lifetimes, there will be multiple conflicts in mutating forms around the globe. Violent conflict will dominate the headlines, but cultural and economic struggles will be steadier and ultimately more decisive. The de facto role of the US armed forces will be to keep the world safe for our economy and open to our cultural assault. To those ends, we will do a fair amount of killing."

"Excerpts From Pentagon's Plan: 'Prevent the Re-Emergence of a New Rival':

"Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union.

This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power. These regions include Western Europe, East Asia, the territory of the former Soviet Union, and Southwest Asia.

There are three additional aspects to this objective: First, the U.S. must show the leadership necessary to establish and protect a new order that holds the promise of convincing potential competitors that they need not aspire to a greater role or pursue a more aggressive posture to protect their legitimate interests.
Second, in the non-defense areas, we must account sufficiently for the interests of the advanced industrial nations to discourage them from challenging our leadership or seeking to overturn the established political and economic order. Finally, we must maintain the mechanisms for deterring potential competitors from even aspiring to a larger regional or global role. An effective reconstitution capability is important here, since it implies that a potential rival could not hope to quickly or easily gain a predominant military position in the world."

... access to vital raw materials, primarily Persian Gulf oil"

Jackrabbit , May 19, 2019 6:01:23 PM | 9
Nemesiscalling @16

GOT is an allegory that explores the nature of power. If you see China's destruction of Washington it says more about you than the show. Firebombing of Dresden might be a more apt analogy.

People always suffer when they allow corrupt sociopaths to gain power. That is as true today as it was in Germany in 1930's and 40's.

The complaints about poor writing are just fan sadness at unexpected horrors that actually make sense for the show. Loose ends created by these horrors will likely be resolved in the last episode tonight.

Maximus , May 19, 2019 6:09:55 PM | 1
Link not working above here it is: https://twitter.com/realgollumtrump?lang=en
Roy G , May 19, 2019 7:12:22 PM | 3
WJ @13 thanks for the link, I am eternally hopeful that this particular thread gets pulled on until it unravels.

One of my distinct memories of the immediate aftermath of 9/11 (I lived in NYC at the time), was the trumpeting of the Post and other tabloids about 'the Dancing Arabs,' which obviously fanned the flames of hatred towards the designated villains. Once it was revealed that they were actually Israelis, then crickets until the whole thing was shoved down the memory hole.

Dolores P Candyarse , May 19, 2019 7:30:47 PM | 4
I'm going out today to buy a couple of Huawei 'phones'.

According to news reports since the moron in charge announced that he had signed an executive order 'blacklisting' Huawei, those lovely humans at Google are denying Huawei phones access to gmail and playstore. The android operating system is open source and still available to Huawei.

Doubtless FB and M$ will follow suit. Getting rid of all the nasty stuff that spies on users 24/7/365 now means that Huawei phones have all the advantages with none of the disadvantages.

They put their own chips in newer models and I have no doubt will find enough bright sparks to take over apps integration meaning that this divergence point will become a boon not a hurdle. Even better a Huawei costs 60% of a comparable korean model and half the price of the fbi backdoored american shit.
I really like thinking expressed by an un-named english politician in a Henry Jackson Society report: ""Huawei has long been accused of espionage" – a claim repeatedly denied by the firm – and notes that "while there are no definitely proven cases", a precautionary principle should be adopted."

All politicians are crooks and liars, everybody says so, lets lock em all up right now, no need for evidence or trial or any of that due process nonsense, the precautionary principle should apply.

Uncoy , May 19, 2019 7:32:02 PM | 5
William Gruff wrote:
I have never seen a single episode of "Game of Thrones" and maybe that delves into ethical complexities that typical western mass media avoids. I wouldn't know.

Having suffered through four seasons of Game of Thrones, after a degree in philology and literature, I'd be happy to share my impressions with you. In Games of Thrones, the good characters are regularly disembowled, choked and drowned to death. Or turn evil. The evil characters grow in power and menace and rarely perish. The overwhelming message is that all people and all power are evil. There is no good in the world or what good there is will be quickly stomped out. Resistance is useless.

The main message is really that resistance is futile . If the powers that be can condition the contemporary (and naturally idealistic) Western youth to accept that hypothesis, any threat to their depredations and financial tyranny is rendered impotent. If resistance is futile, said youth will simply have to accept how things are and try to stay out of the way of tyrannical kings, rapacious queens, brutal captains of the guards and wanton dragons. I.e. sit down and shut up while HRC, John Bolton, John Brennan and James Clapper ruin the planet.

Despite impressive production values, excellent acting (for the most part) and majestic locations, Game of Thrones is truly the most evil large scale creative work I've ever seen. On a philosophical level, Game of Thrones has no redeeming features. At best an impressionable mind might come away with a hedonist mindset, i.e. the traditional salve of weak spirits, carpe diem .

PS. There's some very good comments at the tail end of the Takedown of Heinz-Christian Strache including one of my own covering in some depth the Austrian political background to this event. Worth revisiting if you only saw the early comments.

Colin , May 19, 2019 7:39:27 PM | 6
Analysis from a poll sometimes cited by Chomsky.

See Gallup International poll pg 134
https://www.circap.org/uploads/1/8/1/6/18163511/pollsoniraq-nonus15.pdf

Using populations per country from '03 we get the following conclusions:

of the 36 countries outside the US we get 33% of the world population where less than 8% supported unilateral military action by American and her allies and 57% supported under no circumstances

this list excludes 42 additional countries with another 40% of world population who have had their governments overthrown or attempted to be overthrown by the US since WWII

In the US 33% supported unilateral action, 70% of congress voted for the unilateral military action

Being that the invasion was illegal and unpopular, the Bush admin invented a 'coalition of the willing to give the appearance of support.

The Trump admin needed to create a similar type of facade for the Venezuelan coup. Such things are needed specifically because the move is so unpopular and illegal.

KC , May 19, 2019 8:21:46 PM | 0
At least the alternative media is taking notice of the warmongering tactics of John Bolton .
NemesisCalling , May 19, 2019 9:03:28 PM | 4
@ Jen 29

I suppose that is a valid theory. But as the viewer we know the motivations of Dany and why in some small regard the people in King's Landing deserve a little roughing up.

Thomas Jefferson said: "I tremble for my countrymen because I know God is just..."

The difference here is that we judge Assad even though we don't see what he is truly doing.

Here we see what Dany has done, mass slaughter, and think to ourselves...we kinda had it coming.

NemesisCalling , May 19, 2019 9:21:34 PM | 5
@25 uncoy

Concerning your take on GoT: Isn't this really the thesis of Thucydides through and through reflected in GoT almost to a T?

"The powerful do what they can and the weak suffer what they must." GoT is not disturbing to be nihilistic and shocking. It is holding up a mirror to history. But the quality of the show has declined since they have come to the end of the road in adapting the source material. The show has overtaken the books.

psychohistorian , May 19, 2019 9:51:22 PM | 7
Below is a link from Xinhuanet about the China financial sector opening up China to further open up financial sector: central bank

The take away quote
"
As of the end of March, overseas investors bought a net of 1.77 trillion yuan (about 260.3 billion U.S. dollars) of bonds at the country's interbank bond market, up 31 percent from a year earlier, and held 5.4 trillion yuan of yuan-denominated financial assets, up 19 percent year on year, according to the central bank.
"
What us peasants don't know is the extent to which China will let foreign investment influence their socialistic ways. That said, China is the new empire, private or public is yet to be determined but guess where all the "smart" money in the world is going? The money movements are a giant sucking sound that will leave America under the global economic bus.

Or not and China maintains its socialistic ways including projecting them around the world.

vk , May 19, 2019 10:06:03 PM | 8
The movies Hollywood produced are often telling psychological conflicts as the central story. Each character has a certain fixed attitude and the interacting of the characters create the story. It does not matter if the setting is in antic times or in the far future. In the end there are always the bad and the good guy slamming it out in a fistfight.

The historic Chinese drama which I currently favor are based on sociological storytelling. As they develop the stories form their characters. Their attitudes change over time because the developing exterior circumstances push them into certain directions. Good becomes bad and again good. The persons change because they must, not because the are genetically defined. I find these kind of movies more interesting.

That's the difference between materialism (marxism) and idealism (kantism, hegelianism and noekantism). Besides, an idealist tv series helps selling more merch and doing more sequels, hence the capitalist preference for idealism.

S , May 19, 2019 10:50:33 PM | 3
@KC #12:
China's state media is broadcasting Anti-American movies.

How are these movies "anti-American"? These movies are simply the truth.

psychohistorian , May 19, 2019 10:55:01 PM | 6
Below is my final Xinhuanet link about China/US relations

Chinese FM urges U.S. to avoid further damage of ties in phone call with Pompeo

The take away quote "Wang also reiterated the principled stand against the "long-arm jurisdiction" imposed by the United States." Empire is having its hand slapped back in Venezuela, Iran, Syria, ???

Where are they going to get their war on?

I see empire as a war junkie and they are starting to twitch in withdrawals which is dangerous but a necessary stage. Trumps latest tweets show that level of energy. The spinning plates of empire are not wowing the crowds like before.....what is plan Z?

ben , May 19, 2019 10:58:49 PM | 7
Hot tip, GOT is just a movie. Please, no more psychological insights. What fans really need, is some REAL WORLD justice, something that's noticeably missing in today's world.
Grieved , May 19, 2019 11:21:32 PM | 8
@5 Oliver K

I agree that the American Conservative article was weak - as b obviously thought. It has the US trade war against China completely wrong. I side with b in his hunch that China will win. My own view is that, as with everything the US has done lately, it already lost the war before it even stepped into battle in the theater.

And let's counter the author's point, in the weak article, that China needs the US trade surplus more than the US needs the imports from China. The author says that China has no way to substitute for exports to the US. There's abundant recent analysis on this, showing the relatively small part of China's economy that hinges on this trade, but here's a good Sputnik interview that illustrates how easily China can simply absorb goods into its own domestic market:

Trade War: US to Pay Heavy Price for Underestimating China – Chinese Businessman

I especially liked this part:

"...we have our colossal domestic market, which has no competitors throughout the world. Our consumer and innovation markets provide us with a large number of advantages and room, giving China an opportunity to make a manoeuvre. Therefore, their blockage gives China a chance to become even stronger. We must express our appreciation to our mentor, Trump, for this, for this lesson and for forcing China to figure out how to withstand the threats on its own."

The US used to be an important nation to do business with - commercial, diplomatic, military. But as it has become "agreement incapable", nations are forced to replace it. This takes a little time and readjustment, but then the change is permanent.

Strangest thing of all that the US itself would do the forcing out of itself from the world's trust.

ben , May 19, 2019 11:24:01 PM | 9
For those with a penchant for movie dissection, I offer this from Truthdig;

https://www.truthdig.com/articles/game-of-thrones-an-american-parable/

Zack , May 19, 2019 11:50:54 PM | 0
Trump, Saudi Arabia warn Iran against Middle East conflict
Crown Prince Mohammed bin Salman discussed regional developments, including efforts to strengthen security and stability, in a phone call with U.S. Secretary of State Mike Pompeo, the Saudi Media Ministry tweeted on Sunday.

"We want peace and stability in the region but we will not sit on our hands in light of the continuing Iranian attack," Jubeir said. "The ball is in Iran's court and it is up to Iran to determine what its fate will be."

He said the crew of an Iranian oil tanker that had been towed to Saudi Arabia early this month after a request for help due to engine trouble were still in the kingdom receiving the "necessary care". The crew are 24 Iranians and two Bangladeshis .

Is this a veiled threat on the lives of these crew members?

Kadath , May 20, 2019 12:41:41 AM | 2
Re@ 51 James, well Sputniknews is reporting that the Saudi's claim that the Houthis are planning to attack 300 critical infrastructure facilities in Saudi Arabia and the United Arab Emirates in the coming weeks so that might be the instigating event your concerned about
karlof1 , May 20, 2019 12:45:56 AM | 3
Grieved @44--

Thanks for your kudos! As I've written previously, the political philosophers of the nascent USA thought they would have a Natural Aristocracy ( here and here ) somewhat based on a meritocratic system instead of the Old World's Inherited Aristocracy based on blood relations and closed to anyone not within a very small circle. Yet it was still an Aristocracy with all it inherent evils, and it is that vast assortment of evils the US citizenry has yet to overcome in its supposed--idealized--quest for self-government.

Recall that George Washington was deemed safe to become the first president because he could be trusted not to proclaim himself king --something often forgotten by students of US History.

I've often lamented on the nature of the 1787 Constitution because it allows any POTUS to become a king with almost zero hindrances on the power wielded. Sure, compared with other systems of government at the time, the USA's was revolutionary, but only down to the waist to borrow a phrase from Gilbert & Sullivan. Madison's theory, IMO, was--other than being Aristocratic--okay until his most important check/balance was removed--that of the "dueling oval office" where the losing POTUS candidate was awarded the Vice-Presidency--imagine Hillary Clinton as Veep with Trump in the driver seat! IMO, the 12th Amendment fatally wounded Madison's construction of a government that arrived at great decisions based on a consensus of genuine national interests instead of partisanship.

Arguing that action is the great fault that must be corrected doesn't get much play nowadays. Indeed, it's very difficult to debate Constitutional Reform given the engineered political climate since the current situation suits the Ruling Oligarchy just fine.

I hope everyone had an opportunity to click the link I provided to the series of paintings known as The Course of Empire . ICYMI, here it is again . Please note which Empire's being copied and compare that with the predominant architectural theme in the Outlaw US Empire's Imperium. Creditors ruled and eventually destroyed that Empire. That's one historical lesson that's totally omitted from the historiography of the USA.

By and large, we know what and where the problems are. The fundamental question is, will we ever get the opportunity to fix them?

somebody , May 20, 2019 1:26:48 AM | 5
Posted by: Grieved | May 19, 2019 11:21:32 PM | 48

Their disadvantage is that they have to import energy. So they need export if they do not wish to run a trade deficit. They do not necessarily need the US for this though if they can trade in Yuan.

TJ , May 20, 2019 5:16:46 AM | 1
Speaking of Chinese stories, here in the UK I grew up watching The Water Margin , from the opening titles 'The ancient sages said "do not despise the snake for having no horns, for who is to say it will not become a dragon?" So may one just man become an army.' and also Monkey , the opening titles gave us "The irrepressible spirit of Monkey" .
Thirsty , May 20, 2019 7:55:53 AM | 5
b, it is generally fund raising time during this time for some publishers (i.e. counterpunch etc) and I would like to send you something as well. Can you please post the payment information. Thanks.
Jen , May 20, 2019 8:28:59 AM | 6
Peter AU 1 @ 62:

If you are interested in watching a film with a sociological approach to telling a story and you are close to a cinema, Mike Leigh's "Peterloo" just started screening last Thursday in Australia. The film is an exploration of British society during the Regency period (in the early 19th century), the class attitudes and opinions prevalent then, and the conditions and events that led to 60,000 - 100,000 labouring class people gathering at St Peter's Field in Manchester in August 1819, and how it was viciously broken up by cavalry and foot soldiers acting on orders of the aristocracy.

The film is at least 150 minutes long and is a highly immersive experience. There is not much plot in the Hollywood sense of the term. I believe reviews have been mixed with most film critics complaining about the film being too long and boring. But if you are prepared to watch a film that uses a sociological approach to telling a narrative, then you'll agree with me that the film actually isn't long enough.

Chevrus , May 20, 2019 9:19:33 AM | 0
@Hmpf-59

Very interesting studies and the ideas that they might spawn. The near parallels of the micro and macro as well as the flow patterns.

The culture I am immersed in (USA) is heavily weighted toward the dramatic and two dimensional. Simply put, mass perspective engineering is geared to over simplify and reinforce these views with media imprinting via hollywood, madison ave. etc. The lenses through which impressions from the "outside world" pass through engineered to give the desired results rather than expand consciousness or engender critical thinking. In short, we are breeding for weakness and gullibility.

In regard to large scale dynamics resembling the physics of things like the laws of thermodynamics, I am wondering if phenomena like those alluded to above might be engulfed and influenced by these kinds of natural patterns. So for example: Looking past the drama of sanctions, trade wars, and good guys vs. bad guys, wont the large scale movements caused by these things begin to move according to a kind of physics?

I keep wondering what the result of this latest round of economic warfare will lead to. If the USA continues to sanction, embargo and blockade (at the behest of banking cartels?) will this not cause a mass exodus from dollar reserves, SWIFT, BIS and the like? I hear all sorts of opinions, bushels of dis-info and I'm mostly at a loss as to what to think. We are clearly nearing the end of the Bretton-Woods era so a reset is in order. The USA is a mere 6% of the world population and some would say at the end of it's due date as far an being an "international influencer".

So if they and their EU poodles go ahead and sanction every nation who refuses to bend the knee what's stopping these nations from simply bypassing these decrees and going about their business? I get the sense that this is already happening quietly. Russia, China and various partner nations are creating alternatives in many forms, be they interweb servers, financial networks, OBOR, SCO and more I have never heard of.

Perhaps the ratcheting up of tensions could also be swept up in the turbulence of thermodynamics? If sanctions become embargoes and then blockades, what happens to the "compressions ratios in the Straits of Hormuz?

BM , May 20, 2019 9:26:11 AM | 1
Re: Game of Thrones

Well, I've come across a few advertisements, but I always thought it was some kind of children's video game. I cannot imagine why anyone other than a socially stunted and mis-developed American or Americanised adolescent could want to watch such infantile deranged garbage.

If it is Hollywood, then you can be certain the intention is to manipulate the younger generation to supporting and idolising their permanent wars. On the face of it, that indeed appears to be the case.

OK, I've got that off my chest now!

[Jul 21, 2019] Clinton shared more than a dozen flights with a woman who federal prosecutors believe procured underage girls to sexually service Epstein and his friends and acted as a potential co-conspirator in his crimes

Notable quotes:
"... "I wanted to tell you that I have compiled a list of 34 confirmed minors," Villafana wrote to Lefkowitz. "There are six others, whose name [sic] we already have, who need to be interviewed by the FBI to confirm whether they were 17 or 18 at the time of their activity with Mr. Epstein." ..."
"... Epstein agreed to a 30-month sentence, including 18 months of jail time and 12 months of house arrest and the agreement to pay dozens of young girls under a federal statute providing for compensation to victims of child sexual abuse. .the U.S. Attorney's Office promised not to pursue any federal charges against Epstein or his Named and Un-Named co-conspirators. ..."
"... His legal team? Gerald Lefcourt, Roy Black, Ken Starr, and Alan Dershowitz. ..."
"... The federal non-prosecution agreement Epstein's legal team negotiated immunized all named and unnamed potential co-conspirators in Epstein's child trafficking network, which includes those who allegedly procured minors for Epstein and any powerbrokers who may have molested them." ..."
Feb 23, 2019 | www.zerohedge.com

William Dorritt , 3 hours ago link

LOLITA EXPRESS...ORGY ISLAND...ELITE PEDOPHILE RING ?-2006
* George W Bush President: January 20, 2001 – Jan. 20, 2009
* Alberto R. Gonzales, Attorney General USA: Feb. 3, 2005–Sept. 17, 2007
* Michael Bernard Mukasey, AG. USA: Nov. 9, 2007 – Jan. 20, 2009
* Eric Holder, A G. USA: Feb. 3, 2009 – April 27, 2015
* Loretta Lynch, Attorney General USA: April 27, 2015 – Present
* Assistant U.S. Attorney Marie Villafana
* Epstein's Attorneys: Gerald Lefcourt, Roy Black, Ken Starr, Alan Dershowitz.

+ "He (Epstein) is an enthusiastic member of the Trilateral Commission and the Council on Foreign Relations."

+ Bill Clinton...26 trips aboard the "Lolita Express"

Jeffrey Epstein's Boeing 727 is equipped with the necessary hardware for him to wake up, roll out of bed, and start trading.

+ Clinton shared more than a dozen flights with a woman who federal prosecutors believe procured underage girls to sexually service Epstein and his friends and acted as a "potential co-conspirator" in his crimes.

+ Socialite Ghislaine Maxwell and Epstein's former assistant Sarah Kellen -- have been repeatedly accused in court filings of acting as pimps. Oxford-educated Maxwell, recently seen dining with Clinton at Nello's on Madison Avenue. Manhattan-London G. Maxwell, daughter of the mysteriously deceased media titan Robert Maxwell.

+ A new lawsuit has revealed how Clinton took multiple trips to Epstein's private island where he 'kept young women as sex slaves'

+ Clinton was also apparently friends with a woman who collected naked pictures of underage girls for Epstein to choose from

+ Clinton invited her (pimp) to Chelsea's wedding

+ According to former child sex slave Virginia Roberts and a class action lawsuit against convicted billionaire pedophile Jeffrey Epstein, former President Bill Clinton was present during sex parties involving up to twenty underage girls at Epstein's secluded island in the Caribbean.

+ 20 girls between the ages of 14 and 17 said were sexually abused by Epstein, Palm Beach Police and FBI

+ 35 female minors sexually abused, Epstein settled lawsuits from more than 30 "Jane Doe" victims since 2008; the youngest alleged victim was 12 years old at the time of her abuse.

..............................Source: FBI & Federal Prosecutors

+ flights on Epstein's planes 1997 to 2005, include Dershowitz (FOX NEWS, Harvard Law), former Treasury Secretary and Harvard president Larry Summers, Naomi Campbell, and scientist Stephen Pinker.

+ In the most recent court documents, filed on December 30, Roberts further claims she was sex-trafficked to "many other powerful men, including numerous prominent American politicians, powerful business executives, foreign presidents, a well-known Prime Minister, and other world leaders." Roberts said Epstein trafficked children to politicians, Wall Streeters and A- listers to curry favor, advance his business, and for political influence.

The FIX

2015 Doc Release by Judge:

Assistant U.S. Attorney Marie Villafana wrote to Epstein lawyer Jay Lefkowitz in a Sept. 19, 2007, email. "I will include our standard language regarding resolving all criminal liability and I will mention 'co-conspirators,' but I would prefer not to highlight for the judge all of the other crimes and all of the other persons that we could charge ... maybe we can set a time to meet, if you want to meet 'off campus' somewhere, that is fine. I will make sure that I have all the necessary decision makers present or 'on call' as well."

"I wanted to tell you that I have compiled a list of 34 confirmed minors," Villafana wrote to Lefkowitz. "There are six others, whose name [sic] we already have, who need to be interviewed by the FBI to confirm whether they were 17 or 18 at the time of their activity with Mr. Epstein."

In a December 2007 letter, the prosecutor acknowledges some notifications of alleged victims but says they were sent after the U.S. Attorney's Office signed the plea deal and halted for most of the women at the request of Epstein's lawyers.

"Three victims were notified shortly after the signing of the Non-Prosecution Agreement of the general terms of that Agreement," Villafana wrote, again to Lefkowitz. "You raised objections to any victim notification, and no further notifications were done."

http://www.politico.com/blogs/under-the-radar/2015/07/judge-unseals-more-details-in-jeffrey-epstein-underage-sex-lawsuit-210065

Original Deal Hidden

On Sept. 24, 2007, in a deal shrouded in secrecy that left alleged victims shocked at its leniency,

Epstein agreed to a 30-month sentence, including 18 months of jail time and 12 months of house arrest and the agreement to pay dozens of young girls under a federal statute providing for compensation to victims of child sexual abuse. .the U.S. Attorney's Office promised not to pursue any federal charges against Epstein or his Named and Un-Named co-conspirators.

Sources:

Fox By Malia Zimmerman, May 13, 2016

Daily Mail Reporter 19 March 2014

Gawker Nick Bryant 01/22/15

Western Journalism Kris Zane March 27, 2014

Politico By Josh Gerstein 07/07/15

New York Magazine, By Landon Thomas Jr.

THE FIX IS IN

"In 2006 the FBI counted at least 40 underage girls who had been molested by Epstein. Authorities searched his Florida mansion and found two computers containing child *********** and homemade video and photographs from cameras hidden in bedroom walls which had been used to film sex acts. The case was airtight for many counts of sexual crimes but Palm Beach State Attorney Barry Krischer and the Justice Department stepped in and offered Epstein a plea deal. In 2008 Epstein pleaded guilty in a Florida court to one count of soliciting underage girls for sex. His punishment was 13 months of "8 hour nights only" at a halfway house. No other charges about raping underage girls nor running an underage sex trafficking ring were mentioned in the plea. His legal team? Gerald Lefcourt, Roy Black, Ken Starr, and Alan Dershowitz.

The federal non-prosecution agreement Epstein's legal team negotiated immunized all named and unnamed potential co-conspirators in Epstein's child trafficking network, which includes those who allegedly procured minors for Epstein and any powerbrokers who may have molested them."

http://dcxposed.com/2015/01/26/bilderberg-pervs-island-sin-scandal-threatens-ultra-elite-politicians-lawyers-royalty/

William Dorritt , 3 hours ago link

The Talented Mr. Epstein

Lately, Jeffrey Epstein's high-flying style has been drawing oohs and aahs: the bachelor financier lives in New York's largest private residence, claims to take only billionaires as clients, and flies celebrities including Bill Clinton and Kevin Spacey on his Boeing 727. But pierce his air of mystery and the picture changes. Vicky Ward explores Epstein's investment career, his ties to retail magnate Leslie Wexner, and his complicated past.

June 27, 2011 12:00 am

http://www.vanityfair.com/news/2003/03/jeffrey-epstein-200303

Jeffrey Epstein: International Moneyman of Mystery

So how do termite grouping patterns fare as an investment strategy? Again, facts are hard to come by. A working day for Epstein starts at 5 a.m., when he gets up and scours the world markets on his Bloomberg screen -- each of his houses, in New York, St. Thomas, Palm Beach, and New Mexico, as well as the 727, is equipped with the necessary hardware for him to wake up, roll

http://nymag.com/nymetro/news/people/n_7912/index3.html

[Jul 20, 2019] Escobar Western Intellectuals Freak Over Frankenstein China

Jul 20, 2019 | www.zerohedge.com

Decoupling

Assuming the decoupling would take place, that could be easily perceived as "strategic blackmail" imposed by the Trump administration. Yet what the Trump administration wants is not exactly what the US establishment wants – as shown by an open letter to Trump signed by scores of academics, foreign policy experts and business leaders who are worried that "decoupling" China from the global economy – as if Washington could actually pull off such an impossibility – would generate massive blowback.

What may actually happen in terms of a US-China "decoupling" is what Beijing is already, actively working on: extending trade partnerships with the EU and across the Global South.

And that will lead, according to Li, to the Chinese leadership offering deeper and wider market access to its partners. This will soon be the case with the EU, as discussed in Brussels in the spring.

Sun Jie, a researcher at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said that deepening partnerships with the Association of Southeast Asian Nations (Asean) will be essential in case a decoupling is in the cards.

For his part Liu Qing, an economics professor at Renmin University, stressed the need for top international relations management, dealing with everyone from Europe to the Global South, to prevent their companies from replacing Chinese companies in selected global supply chains.

And Wang Xiaosong, an economics professor at Renmin University, emphasized that a concerted Chinese strategic approach in dealing with Washington is absolutely paramount.

All about Belt and Road

A few optimists among Western intellectuals would rather characterize what is going on as a vibrant debate between proponents of "restraint" and "offshore balancing" and proponents of "liberal hegemony". In fact, it's actually a firefight.

Among the Western intellectuals singled out by the puzzled Frankenstein guy, it is virtually impossible to find another voice of reason to match Martin Jacques , now a senior fellow at Cambridge University. When China Rules the World , his hefty tome published 10 years ago, still leaps out of an editorial wasteland of almost uniformly dull publications by so-called Western "experts" on China.

Jacques has understood that now it's all about the New Silk Roads, or Belt and Road Initiative:

"BRI has the potential to offer another kind of world, another set of values, another set of imperatives, another way of organizing, another set of institutions, another set of relationships."

Belt and Road, adds Jacques, "offers an alternative to the existing international order. The present international order was designed by and still essentially privileges the rich world, which represents only 15% of the world's population. BRI, on the other hand, is addressing at least two-thirds of the world's population. This is extraordinarily important for this moment in history."

[Jul 18, 2019] Dmitry Orlov offers a highly-pertinent review of a current report to the US Congress about the severe degradation of the US's capacity to produce ANY heavy industrial goods

Jul 18, 2019 | www.moonofalabama.org

Rhisiart Gwilym , Jul 17 2019 22:35 utc | 66

@ Trailer Trash 23

Dmitry Orlov offers a highly-pertinent review of a current report to the US Congress about the severe degradation of the US's capacity to produce ANY heavy industrial goods - including advanced weapons such as replacement aircraft carriers, cruisers, tanks and all the rest - within its own borders, independent of (exceedingly vulnerable) global supply networks:

http://cluborlov.blogspot.com/2019/07/war-profiteers-and-demise-of-us.html#more

Also, the US only has 'plenty' of fossil-hydrocarbon fuel on cloud-cuckoo-land paper. In reality, it has quite a lot of such stuff which it will never access, and will never be able to access, because of the non-negotiable, iron logic of EROEI and EROCI (the second acronym relating to energy returned on financial capital invested; currently a long way red-ink negative across the whole US fracking ponzi). EROEI refers to the even more intractable, terminally-insoluble problem of energy returned on ENERGY invested. When this gets down to around 4 to 1 or thereabouts, it's game over for actually being able to maintain an industrial hitech society that can hope - credibly - to do fossil-hydrocarbon mining in any seriously challenging conditions - which most of the world's remaining pools of such fuels now exhibit.

These predicaments are qualitatively different from problems; problems, by definition, can hope to be solved; predicaments, inherently, can't be, and can only be endured. The world is now close to the edge of a decisive non-availability of sufficient fossil-hydrocarbon fuels to keep even a skeleton semblance of modern hitech industrial society operating - at all. That's the predicament that is already staring us in the face, and that will soon be trampling us into the ground. Doesn't mean that hopeless political inadequates such as PompousHippo and The Insane Geriatric Walrus won't attempt to trigger such insanity as an aggression against Iran, though, they being too stupid, too delusional, and too morally-degenarate, to know any better.

This is the overall situation which insists that the US has literally zero chance of attacking Iran, and actually getting anything remotely resembling a 'win' out of it. Read Dmitry's piece to get a more detailed outline of why this is so.

PS: The above considerations apply just as decisively to the US's nuclear weapon capacity as they do to all the other hitech industrial toys which USAmerica is now barely able to produce on its own - at all.

[Jul 18, 2019] Most of the lost US manufacturing jobs in recent decades probably are not coming back

Notable quotes:
"... Of course, correlation is not causation, and there is no shortage of alternative explanations for the decline in U.S. manufacturing. Globalization, offshoring, and skills gaps are just three frequently cited causes. Moreover, some researchers, like MIT's David Autor, have argued that workers are benefiting from working alongside robots. ..."
"... Yet the evidence suggests there is essentially no relationship between the change in manufacturing employment and robot use. Despite the installation of far more robots between 1993 and 2007, Germany lost just 19 percent of its manufacturing jobs between 1996 and 2012 compared to a 33 percent drop in the United States. (We introduce a three-year time lag to allow for robots to influence the labor market and continued with the most recent data, 2012). ..."
"... Korea, France, and Italy also lost fewer manufacturing jobs than the United States even as they introduced more industrial robots. On the other hand, countries like the United Kingdom and Australia invested less in robots but saw faster declines in their manufacturing sectors. ..."
Jan 28, 2017 | economistsview.typepad.com
Peter K. : January 28, 2017 at 01:49 PM , 2017 at 01:49 PM
https://www.brookings.edu/blog/the-avenue/2015/04/29/dont-blame-the-robots-for-lost-manufacturing-jobs/

Don't blame the robots for lost manufacturing jobs

Scott Andes and Mark Muro

Wednesday, April 29, 2015

a recent blog we described new research by George Graetz and Guy Michaels that shows the impact of automation technology in productivity statistics. So now there is good evidence that robots are a driver of economic growth.

However, this new evidence poses a question: Has productivity growth from robots come at the cost of manufacturing jobs?

Between 1993 and 2007 (the timeframe studied by Graetz and Micheals) the United States increased the number of robots per hour worked by 237 percent. During the same period the U.S. economy shed 2.2 million manufacturing jobs. Assuming the two trends are linked doesn't seem farfetched.

Of course, correlation is not causation, and there is no shortage of alternative explanations for the decline in U.S. manufacturing. Globalization, offshoring, and skills gaps are just three frequently cited causes. Moreover, some researchers, like MIT's David Autor, have argued that workers are benefiting from working alongside robots.

So is there a relationship between job loss and the use of industrial robots?

The substantial variation of the degree to which countries deploy robots should provide clues. If robots are a substitute for human workers, then one would expect the countries with much higher investment rates in automation technology to have experienced greater employment loss in their manufacturing sectors. Germany deploys over three times as many robots per hour worked than the United States, largely due to Germany's robust automotive industry, which is by far the most robot-intensive industry (with over 10 times more robots per worker than the average industry). Sweden has 60 percent more robots per hour worked than the United States thanks to its highly technical metal and chemical industries.

Yet the evidence suggests there is essentially no relationship between the change in manufacturing employment and robot use. Despite the installation of far more robots between 1993 and 2007, Germany lost just 19 percent of its manufacturing jobs between 1996 and 2012 compared to a 33 percent drop in the United States. (We introduce a three-year time lag to allow for robots to influence the labor market and continued with the most recent data, 2012).

Korea, France, and Italy also lost fewer manufacturing jobs than the United States even as they introduced more industrial robots. On the other hand, countries like the United Kingdom and Australia invested less in robots but saw faster declines in their manufacturing sectors.

...

Peter K. -> Peter K.... , January 28, 2017 at 02:12 PM
"Despite the installation of far more robots between 1993 and 2007, Germany lost just 19 percent of its manufacturing jobs between 1996 and 2012 compared to a 33 percent drop in the United States. "

Yes the U.S. and Germany have a similar pattern. So what.

Peter K. : , January 28, 2017 at 02:07 PM
https://www.bloomberg.com/news/articles/2014-04-28/why-factory-jobs-are-shrinking-everywhere

Why Factory Jobs Are Shrinking Everywhere
by Charles Kenny

April 28, 2014, 1:16 PM EDT

A report from the Boston Consulting Group last week suggested the U.S. had become the second-most-competitive manufacturing location among the 25 largest manufacturing exporters worldwide. While that news is welcome, most of the lost U.S. manufacturing jobs in recent decades aren't coming back. In 1970, more than a quarter of U.S. employees worked in manufacturing. By 2010, only one in 10 did.

The growth in imports from China had a role in that decline–contributing, perhaps, to as much as one-quarter of the employment drop-off from 1991 to 2007, according to an analysis by David Autor and colleagues at the Massachusetts Institute of Technology. But the U.S. jobs slide began well before China's rise as a manufacturing power. And manufacturing employment is falling almost everywhere, including in China. The phenomenon is driven by technology, and there's reason to think developing countries are going to follow a different path to wealth than the U.S. did-one that involves a lot more jobs in the services sector.

Pretty much every economy around the world has a low or declining share of manufacturing jobs. According to OECD data, the U.K. and Australia have seen their share of manufacturing drop by around two-thirds since 1971. Germany's share halved, and manufacturing's contribution to gross domestic product there fell from 30 percent in 1980 to 22 percent today. In South Korea, a late industrializer and exemplar of miracle growth, the manufacturing share of employment rose from 13 percent in 1970 to 28 percent in 1991; it's fallen to 17 percent today.

...

Peter K. -> Peter K.... , January 28, 2017 at 02:11 PM
In the United States, manufacturing employment went from 25 percent in 1970 to 10 percent in 2010, 40 years later.

In Germany, manufacturing's share of GDP went from 30 percent in 1980 to 22 percent today (2014, 34 years later).

Yes there's a similar pattern, as DeLong points out.

How does that support his argument?

[Jul 18, 2019] Israel Has Almost as Many Religious Restrictions as Iran, Pew Report Finds

Notable quotes:
"... The report, published Monday by the Pew Research Center, tracks the rise of religious restrictions globally. Israel was one of the top 20 most religiously restrictive countries in the world, according to Pew. It also has the fifth-highest level of "social hostilities related to religious norms," and the sixth-highest level of "interreligious tension and violence" -- a worse score than Syria . ..."
"... Israel self-defines as a Jewish state. Its haredi Orthodox Chief Rabbinate controls all recognized marriage, divorce, burial and Jewish conversion in the country, which means that non-Orthodox weddings, divorces, funerals and conversions are not recognized by the state. The state likewise does not recognize intermarriages conducted in the country. Most cities do not run public transit on Shabbat. ..."
Jul 18, 2019 | www.haaretz.com

Israel is one of the top 20 most religiously restrictive countries in the world, research center says

JTA and Ben Sales Jul 17, 2019 9:40 AM 10 comments Zen Subscribe now

A Jewish man waves an Israeli flag as he participates in a march marking "Jerusalem Day", near Damascus Gate in Jerusalem's Old City June 2, 2019. Amir Cohen / REUTERS

When it comes to restrictions on religious freedom, Israel is in the company of countries like Saudi Arabia, Syria and Iran, a new report says.

The report also noted a rise in restrictions on Jewish practice in Europe, as well as an increase of attacks on Jews. It said Jews were harassed in 87 countries in 2017, the third-highest figure for any religion.

The report, published Monday by the Pew Research Center, tracks the rise of religious restrictions globally. Israel was one of the top 20 most religiously restrictive countries in the world, according to Pew. It also has the fifth-highest level of "social hostilities related to religious norms," and the sixth-highest level of "interreligious tension and violence" -- a worse score than Syria .

>> Read more: Smotrich's 'Laws of the Torah' are as delusional as the Christian right's 'Judeo-Christian values' | Opinion ■ Not the Palestinians, the economy or even Netanyahu: Election will test Israel's Jewish character | Analysis

The report cited incidents in Israel like harassment of people who drive cars near haredi Orthodox neighborhoods on Shabbat , or government officials who "defer in some way to religious authorities or doctrines on legal issues."

Israel self-defines as a Jewish state. Its haredi Orthodox Chief Rabbinate controls all recognized marriage, divorce, burial and Jewish conversion in the country, which means that non-Orthodox weddings, divorces, funerals and conversions are not recognized by the state. The state likewise does not recognize intermarriages conducted in the country. Most cities do not run public transit on Shabbat.

Regarding restrictions on Jews worldwide, the report pointed out government interference in circumcision in Germany and Slovenia. And the report noted rising anti-Semitic and neo-Nazi activity, including assaults on Jews, in Europe and the United States.

[Jul 17, 2019] Donald Trump's false comments connecting Mexican immigrants and crime - The Washington Post

Jul 17, 2019 | www.washingtonpost.com

Donald Trump's false comments connecting Mexican immigrants and crime By Michelle Ye Hee Lee July 8, 2015

"When Mexico sends its people, they're not sending their best. They're not sending you. They're not sending you. They're sending people that have lots of problems, and they're bringing those problems with us. They're bringing drugs. They're bringing crime. They're rapists. And some, I assume, are good people."

–Real estate mogul Donald Trump, presidential announcement speech , June 16, 2015

"I can never apologize for the truth. I don't mind apologizing for things. But I can't apologize for the truth. I said tremendous crime is coming across. Everybody knows that's true. And it's happening all the time. So, why, when I mention, all of a sudden I'm a racist. I'm not a racist. I don't have a racist bone in my body."

–Trump, interview on Fox News' "Media Buzz," July 5, 2015

"What can be simpler or more accurately stated? The Mexican Government is forcing their most unwanted people into the United States. They are, in many cases, criminals, drug dealers, rapists, etc."

–Trump, statement about his June 16 comments, July 6, 2015

Several readers asked us to fact-check Trump's initial comment, which has drawn outrage from Latino groups and led to breakups with his corporate partners distancing themselves from the inflammatory remarks.

This posed a conundrum for The Fact Checker. We had fact checked most of his statements from his news conference announcing his effort to win the GOP presidential nomination, but many of those were in the realm of domestic and international policy. We tend not to wade into fact checking incendiary comments that some might label opinion.

But Trump's statement -- which he repeatedly has defended -- underscores public perceptions that can drive immigration policies. For example, the 2010 murder of a rancher by a suspected smuggler in an Arizona border city fueled public and political pressure on then-Gov. Jan Brewer to sign the controversial anti-immigrant Senate Bill 1070 into law.

What do the data tell us about the criminal threat of immigrants?

The Facts

Data on immigrants and crime are incomplete, but a range of studies show there is no evidence immigrants commit more crimes than native-born Americans. In fact, first-generation immigrants are predisposed to lower crime rates than native-born Americans. (The Center for Immigration Studies, which advocates for restrictive immigration laws, has a detailed report showing the shortfalls of immigrant crime data.)

Immigration and crime levels have had inverse trajectories since the 1990s: immigration has increased, while crime has decreased. Some experts say the influx of immigrants contributed to the decrease in crime rates, by increasing the denominator while not adding significantly to the numerator.

In his July 6 statement, Trump clarified that he was referring to cases where undocumented immigrants commit violent crimes or smuggle drugs. He pointed to the recent incident in San Francisco , where an undocumented immigrant and a repeat felon who had been deported five times to Mexico was arrested on suspicion of fatally shooting a woman.

Trump's campaign pointed to data from the U.S. Sentencing Commission , which tracks citizenship of offenders in federal prisons by primary offense, which is the offense with the longest maximum sentence when a person is convicted of multiple offenses. Of 78,022 primary offense cases in fiscal year 2013, 38.6 percent were illegal immigrant offenders. The majority of their cases (76 percent) were immigration related. Of total primary offenses, 17.6 percent of drug trafficking offenses and 3.8 percent of sex abuse were illegal immigrants. Of 22,878 drug crime cases, 17.2 percent were illegal immigrants.

But these numbers are not indicative of general crime trends of non-citizens. Federal prisoners made up 10 percent of the total incarcerated population in the United States in 2013. When asked how the data are indicative of the Mexican government sending criminals to the United States, or that there is a crime wave coming across the border, a Trump campaign adviser said: "The data speaks for itself."

The Congressional Research Service found that the vast majority of unauthorized immigrants do not fit in the category that fits Trump's description: aggravated felons, whose crimes include murder, drug trafficking or illegal trafficking of firearms.


(Congressional Research Service)

CRS also found that non-citizens make up a smaller percentage of the inmate population in state prisons and jails, compared to their percentage to the total U.S. population.

[Jul 12, 2019] Nine Consequences of the Upcoming US-China Trade War by Renaud Anjoran

Highly recommended!
This author really knows what he is talking about
Notable quotes:
"... When tariffs went up from 0 to 10% on some product categories last year, many suppliers agreed to absorb half that amount (5%) in exchange for larger orders. The logic was as follows: higher orders lead to better deals with component suppliers and to higher production efficiencies, which means lower costs. ..."
"... Do you ship American wood for processing in China and re-exporting to the US? You might have issues getting that material into China as smoothly as before. And then, the US Customs office might give you a hard time when you bring the goods in, too! ..."
"... Who knows what non-monetary barriers the Chinese will erect. One can count on their creativity ..."
"... Several US companies asked our company to look for assembly plants in Vietnam and, in those cases where we found some options, they were much more expensive than China. There is a reason why China's share of hard goods production in Asia has kept growing in recent years -- competition is often non-existent. ..."
"... Now, with China's products suddenly much more expensive, what are these competing countries going to do? Won't they take advantage of it and push wages further up, at least for the export manufacturing sector? ..."
"... Mexico should be the clear winner of this trade war. They are next to the US, their labor cost is comparable to that of China, and many American companies have long had extensive operations there. ..."
May 09, 2019 | qualityinspection.org

https://qualityinspection.org/9-consequences-us-china-trade-war/

Based on all the articles I have read about the current geopolitical situation, I am not optimistic about the affect of the US-China trade war on American importers. Dan Harris, who wrote " the US-China Cold War start now, " announced that a "mega-storm" might be coming, and he may be right.

Now, if things turn out as bad as predicted, and if tariffs apply on more goods imported from China to the US -- and at higher rates -- what does it mean for US importers?

What will the damage from the US-China trade war look like?

These are my thoughts about who or what is going to be hit hard by the ongoing 'trade war:'

1. Small importers will be hit much harder than larger ones

If you work with very large Chinese manufacturers, many of them have already started to set up operations outside of mainland China, for the simple reason that most of their customers have been pushing for that.

They are in Vietnam, Malaysia, etc. And this is true in most industries -- from apparel to electronics.

Do they still have to import most of their components from China? It depends on their footprints. As I wrote before :

You set up a mammoth plant and you don't want your high-value component suppliers to be more than 1 hour away from you, for just-in-time inventory replenishment? They can be requested to set up a new manufacturing facility next to you.

2. A higher total cost of goods purchased from China

This one is obvious. If you have orders already in production, they will cost you more than expected.

The RMB might slide quite a bit, and that might alleviate the total cost. I hope you have followed my advice and started paying your suppliers in RMB , to benefit from it automatically.

Beijing might also give other forms of subsidies to their exporters. They might be quite visible (e.g. a higher VAT rebate) or totally 'under the table'.

3. Difficult negotiations with Chinese suppliers

Can you say the tariffs are Beijing's fault, and so your suppliers should absorb the tariffs? That's not going to work.

When tariffs went up from 0 to 10% on some product categories last year, many suppliers agreed to absorb half that amount (5%) in exchange for larger orders. The logic was as follows: higher orders lead to better deals with component suppliers and to higher production efficiencies, which means lower costs.

When tariffs go from 10% to 35%, what else can US buyers give their counter-parties? Payments in advance? Lower quality standards? I don't believe that.

4. Difficulties at several levels in the supply chain

Do you ship American wood for processing in China and re-exporting to the US? You might have issues getting that material into China as smoothly as before. And then, the US Customs office might give you a hard time when you bring the goods in, too!

Who knows what non-monetary barriers the Chinese will erect. One can count on their creativity

5. Short-term non-elasticity of alternative sources

There are a finite number of Vietnamese export-ready manufacturers that can make your orders. And, chances are, their capacity is already full. If you haven't prepared this move for months (or years), other US companies have. The early bird gets the worm

Same thing with Thailand, Indonesia, India, and so on, with the exception of apparel and (maybe) footwear.

Several US companies asked our company to look for assembly plants in Vietnam and, in those cases where we found some options, they were much more expensive than China. There is a reason why China's share of hard goods production in Asia has kept growing in recent years -- competition is often non-existent.

6. Faster cost increases in other low-cost Asian countries

As I wrote before, since China announced their 5-year plan to increase wages, other Asian countries adopted similar plans . That's how we got to this upward trend across the board:

Minimum wage comparison

Now, with China's products suddenly much more expensive, what are these competing countries going to do? Won't they take advantage of it and push wages further up, at least for the export manufacturing sector?

There could be some 'silver linings' due to the trade war

It is not all bad news though. We may see these benefits caused by China and the USA slugging it out too:

7. Many opportunities for Mexico

Mexico should be the clear winner of this trade war. They are next to the US, their labor cost is comparable to that of China, and many American companies have long had extensive operations there.

8. Rapid consolidation in the Chinese manufacturing sector

The fittest will survive. Many uncompetitive manufacturers and traders will fold. Consolidation will accelerate. I often look at what happened in Japan and South Korea . Each of these countries developed very fast and, when the going got tough, the export manufacturing sector got devastated. Only the most competitive survived.

9. Relaxed enforcement of anti-pollution regulations in China?

I'd bet that, if the tariffs hit hard, far fewer operations will get closed for environmental reasons. Preserving employment and social peace will prevail.

[Jul 12, 2019] The British welfare state, the war on poverty/great society policy era, and the Scandinavian social model are not replacements for capitalism. They are forms of capitalism

Notable quotes:
"... There are two problems with storming the Winter Palace. First, you won't have a decisive majority of Americans behind you. Second, you have no idea what you'd do if somehow did seize the Winter Palace. You could conceivably solve the first problem by going balls out demagogue a la Hugo Chavez; but, like Chavez, you'd have to dispense with democracy to keep power because you have no solution to the second problem. For my money, a decent social democracy-universal healthy care, more progressive taxes, a higher minimum wage, more affordable college education, etc.- is plenty hard enough to secure. ..."
"... Before the long-decline began in the 70s, a large fraction of the UK's economic activity was chartered, regulated, and/or managed for the people. That's not capitalism, by definition. ..."
Feb 12, 2017 | economistsview.typepad.com
yuan -> Jim Harrison ... , February 10, 2017 at 12:34 PM
"Does anybody around here have anything useful to suggest"

both demonstration and general strikes are powerful ways to express popular outrage. one is planned on for the 17th (too soon) and another more organized one is being planned for march.

http://f17strike.com/

"but you have no more of an idea of a global replacement for capitalism"

so the British welfare state, the war on poverty/great society policy era, and the Scandinavian social model are impossible pipe dreams because...

Jim Harrison -> yuan... , February 10, 2017 at 01:46 PM
"the British welfare state, the war on poverty/great society policy era, and the Scandinavian social model are" not replacements for capitalism. They are forms of capitalism. And the sorts of policies that go with these versions of conventional social democracy are...pretty much the platform articles that Clinton ran on. Which is the serious reason the American right despised Hillary. They, at least, didn't have any trouble telling the candidates apart.

There are two problems with storming the Winter Palace. First, you won't have a decisive majority of Americans behind you. Second, you have no idea what you'd do if somehow did seize the Winter Palace. You could conceivably solve the first problem by going balls out demagogue a la Hugo Chavez; but, like Chavez, you'd have to dispense with democracy to keep power because you have no solution to the second problem. For my money, a decent social democracy-universal healthy care, more progressive taxes, a higher minimum wage, more affordable college education, etc.- is plenty hard enough to secure.

yuan -> Jim Harrison ... , February 10, 2017 at 04:50 PM
"They are forms of capitalism."

Before the long-decline began in the 70s, a large fraction of the UK's economic activity was chartered, regulated, and/or managed for the people. That's not capitalism, by definition. (Socialism was a market/trade-based system at its inception. The tendencies with alternative economic models came later.)

Some history: https://en.wikipedia.org/wiki/Clause_IV

And Corbyn has returned labor to its socialist roots: http://www.independent.co.uk/news/uk/politics/jeremy-corbyn-to-bring-back-clause-four-contender-pledges-to-bury-new-labour-with-commitment-to-10446982.html


"And the sorts of policies that go with these versions of conventional social democracy are...pretty much the platform articles that Clinton ran on."

I guess I missed Clinton advocating for the nationalization of health care, education, energy production, and transportation.

And the "welfare state" has little to do with "social democracy" (whatever that recent nonsense phrase means), all of them were developed by socialist movements.

[Jul 06, 2019] Neoliberalism start collapsing as soon as considerable part of the electorate has lost hope that thier standard of living will improve

Pretty superficial article, but some points are interesting. Especially the fact that the collapse of neoliberalism like collapse of Bolshevism is connected with its inability to raise the standard of living of population in major Western countries, despite looting of the USSR and Middle eastern countries since 1991. Spoils of victory in the Cold War never got to common people. All was appropriated by greedy "New Class" of neoliberal oligarchs.
The same was true with Bolshevism in the USSR. The communist ideology was dead after WWII when it became clear that "proletariat" is not a new class destined to take over and the "iron law of oligarchy" was discovered. Collapse happened in 45 years since the end of WWII. Neoliberal ideology was dead in 2008. It would be interesting to see if neoliberalism as a social system survives past 2050.
The level of degeneration of the USA elite probably exceeds the level of degeneration of Nomenklatura even now.
Notable quotes:
"... A big reason why liberal democracies in Europe have remained relatively stable since WWII is that most Europeans have had hope that their lives will improve. A big reason why the radical vote has recently been on the rise in several European countries is that part of the electorate has lost this hope. People are increasingly worried that not only their own lives but also the lives of their children will not improve and that the playing field is not level. ..."
"... As a result, the traditional liberal package of external liberalisation and internal redistribution has lost its appeal with the electorate, conceding ground to the alternative package of the radical right that consists of external protectionism and internal liberalisation ..."
"... Mr Mody said the bottom half of German society has not seen any increase in real incomes in a generation. ..."
"... The reforms pushed seven million people into part-time 'mini-jobs' paying €450 (£399) a month. It lead to corrosive "pauperisation". This remains the case even though the economy is humming and surging exports have pushed the current account surplus to 8.5pc of GDP." ..."
"... "British referendum on EU membership can be explained to a remarkable extent as a vote against globalisation much more than immigration " ..."
"... As an FYI to the author immigration is just the flip side of the same coin. Why were immigrants migrating? Often it's because they can no longer make a living where they left. Why? Often globalization impacts. ..."
"... The laws of biology and physics and whatever else say that the host that is being parasitised upon, cannot support the endless growth of the parasites attached upon it. The unfortunate host will eventually die. ..."
"... "negative effects of globalisation: foreign competition, factory closures, persistent unemployment, stagnating purchasing power, deteriorating infrastructures and public services" ..."
"... he ruling elites have broken away from the people. The obvious problem is the gap between the interests of the elites and the overwhelming majority of the people. ..."
"... One of the things we must do in Russia is never to forget that the purpose of the operation and existence of any government is to create a stable, normal, safe and predictable life for the people and to work towards a better future. ..."
"... "If you're not willing to kill everybody who has a different idea than yourself, you cannot have Frederick Hayek's free market. You cannot have Alan Greenspan or the Chicago School, you cannot have the economic freedom that is freedom for the rentiers and the FIRE (finance, insurance, real estate) sector to reduce the rest of the economy to serfdom." ~ Michael Hudson ..."
"... I'm surprised more people don't vote for neo-fascist parties like the Golden Dawn. Ordinary liberal politics has completely failed them. ..."
Jul 06, 2019 | www.nakedcapitalism.com

The more a local economy has been negatively affected by the two shocks, the more its electors have shifted towards the radical right and its policy packages. These packages typically combine the retrenchment against international openness and the liberalisation of the internal market and more convincingly address the demand for protection by an electorate that, after the austerity following the Crisis, no longer trusts alternatives based on more liberal stances on foreign relations and the parallel promise of a stronger welfare state.

A big reason why liberal democracies in Europe have remained relatively stable since WWII is that most Europeans have had hope that their lives will improve. A big reason why the radical vote has recently been on the rise in several European countries is that part of the electorate has lost this hope. People are increasingly worried that not only their own lives but also the lives of their children will not improve and that the playing field is not level.

On the one hand, despite some progress in curtailing 'tax havens' in recent years, there has never been as much wealth in tax havens as there is today (Zucman 2015). This is seen as unfair because, if public goods and services (including those required to help the transition to a 'green economy') have to be provided in the regions where such hidden wealth comes from, lost tax revenues have to be compensated for by higher taxes on law-abiding households.

On the other hand, fairness is also undermined by dwindling social mobility. In the last decades, social mobility has slowed down across large parts of the industrialised world (OECD 2018), both within and between generations. Social mobility varies greatly across regions within countries, correlates positively with economic activity, education, and social capital, and negatively with inequality (Güell at al. 2018). Renewed migration from the South to the North of Europe after the Crisis (Van Mol and de Valk 2016) is a testimony of the widening relative lack of opportunities in the places that have suffered the most from competition from low-wage countries.

Concluding Remarks

Globalisation has come accompanied by the Great Convergence between countries around the world but also the Great Divergence between regions within several industrialised countries. The same holds within the EU. In recent years, redistributive policies have had only a very limited impact in terms of reversing growing regional inequality.

As a result, the traditional liberal package of external liberalisation and internal redistribution has lost its appeal with the electorate, conceding ground to the alternative package of the radical right that consists of external protectionism and internal liberalisation.

This is both inefficient and unlikely to lead to more regional convergence. What the political and policy debate in Europe is arguably missing is a clearer focus on two of the main underlying causes of peoples' growing distrust in national and international institutions: fiscal fairness and social mobility.

See original post for references


Jesper , July 3, 2019 at 12:37 pm

When did this traditional liberal package mentioned in the concluding remarks ever happen?

the traditional liberal package of external liberalisation and internal redistribution has lost its appeal with the electorate

Maybe if it was clear who got it, what it was, when it was done, how it happened then people might find this liberal package appealing.

flora , July 3, 2019 at 11:26 pm

Right. It would be better to say "the traditional New Deal liberal package " has not lost its appeal, it was killed off bit by bit starting with NAFTA. From a 2016 Thomas Frank essay in Salon:

That appeal to [educated credentialed] class unity gives a hint of what Clintonism was all about. To owners and shareholders, who would see labor costs go down as they took advantage of unorganized Mexican labor and lax Mexican environmental enforcement, NAFTA held fantastic promise. To American workers, it threatened to send their power, and hence their wages, straight down the chute. To the mass of the professional-managerial class, people who weren't directly threatened by the treaty, holding an opinion on NAFTA was a matter of deferring to the correct experts -- economists in this case, 283 of whom had signed a statement declaring the treaty "will be a net positive for the United States, both in terms of employment creation and overall economic growth."

The predictions of people who opposed the agreement turned out to be far closer to what eventually came to pass than did the rosy scenarios of those 283 economists and the victorious President Clinton. NAFTA was supposed to encourage U.S. exports to Mexico; the opposite is what happened, and in a huge way. NAFTA was supposed to increase employment in the U.S.; a study from 2010 counts almost 700,000 jobs lost in America thanks to the treaty. And, as feared, the agreement gave one class in America enormous leverage over the other: employers now routinely threaten to move their operations to Mexico if their workers organize. A surprisingly large number of them -- far more than in the pre-NAFTA days -- have actually made good on the threat.

Twenty years later, the broader class divide over the subject persists as well. According to a 2014 survey of attitudes toward NAFTA after two decades, public opinion remains split. But among people with professional degrees -- which is to say, the liberal class -- the positive view remains the default. Knowing that free-trade treaties are always for the best -- even when they empirically are not -- seems to have become for the well-graduated a badge of belonging.

https://www.salon.com/2016/03/14/bill_clintons_odious_presidency_thomas_frank_on_the_real_history_of_the_90s/

The only internal redistribution that's happened in the past 25 – 30 yearsis from the bottom 80% to the top 10% and especially to the top 1/10th of 1 %.

Not hard to imagine why the current internal redistribution model has lost its appeal with the electorate.

Sound of the Suburbs, , July 3, 2019 at 1:50 pm

UK policymakers had a great plan for globalisation.

Everyone needs to specialise in something and we will specialise in finance based in London.

That was it.

rd , , July 3, 2019 at 1:58 pm

I think there are two different globalizations that people are responding to.

1. Their jobs go away to somewhere in the globe that has lower wages, lower labor protections, and lower environmental protections. So their community largely stays the same but with dwindling job prospects and people slowly moving away.

2. The world comes to their community where they see immigrants (legal, illegal, refugees) coming in and are willing to work harder for less, as well as having different appearance, languages, religion, and customs. North America has always had this as we are built on immigration. Europe is much more focused on terroire. If somebody or something has only been there for a century, they are new.

If you combine both in a community, you have lit a stick of dynamite as the locals feel trapped with no way out. Then you get Brexit and Trump. In the US, many jobs were sent overseas and so new people coming in are viewed as competitors and agents of change instead of just new hired help. The same happened in Britain. In mainland Europe with less inequality and more job protection, it is more of just being overwhelmed by the sheer quantity of newcomers in a society that does not prize that at all.

Sound of the Suburbs, , July 3, 2019 at 2:04 pm

I saw the warning signs when Golden Dawn appeared in Greece

The liberals said it was just a one off, as they always do, until it isn't.

How did successful Germany turn into a country where extremism would flourish?
The Hartz IV reforms created the economic hardship that causes extremism to flourish.

"Germany is turning to soft nationalism. People on low incomes are voting against authority because the consensus on equality and justice has broken down. It is the same pattern across Europe," said Ashoka Mody, a former bail-out chief for the International Monetary Fund in Europe.

Mr Mody said the bottom half of German society has not seen any increase in real incomes in a generation. The Hartz IV reforms in 2003 and 2004 made it easier to fire workers, leading to wage compression as companies threatened to move plants to Eastern Europe.

The reforms pushed seven million people into part-time 'mini-jobs' paying €450 (£399) a month. It lead to corrosive "pauperisation". This remains the case even though the economy is humming and surging exports have pushed the current account surplus to 8.5pc of GDP."

This is a successful European country, imagine what the others look like.

Adam1 , July 3, 2019 at 2:20 pm

"British referendum on EU membership can be explained to a remarkable extent as a vote against globalisation much more than immigration "

As an FYI to the author immigration is just the flip side of the same coin. Why were immigrants migrating? Often it's because they can no longer make a living where they left. Why? Often globalization impacts.

Summer , July 3, 2019 at 4:23 pm

Another recap about that really just mourns the lack of trust in the establishment, with no answers. More "I can't believe people are sick to death of experts of dubious skills but networking "

What it is just admitted that a system that can only work great for 20% of any given population if they are born in the right region with the right last name just simply not work except as an exercise in extraction?

And about the EU as if it could never be taken over by bigger authoritatians than the ones already populating it. Then see how much those who think it is some forever bastion of liberalism over sovereignity likes it .

Which is worse - bankers or terrorists , July 4, 2019 at 7:21 am

"Another recap about that really just mourns the lack of trust in the establishment, with no answers."

Usually it involves replacing the establishment or creating an internal threat to reinstate compliance in the establish (Strauss and Howe).

Strategies for initiate the former may be impossible in this era where the deep state can read your thoughts through digital media so you would like it would trend to the latter.

stan6565 , July 3, 2019 at 4:35 pm

Mmmmm, yes, migration, globalisation and such like.

But, unregulated migration into an established environment, say a country, say, UK, on one hand furthers profits to those benefiting from low labour wages (mainly, friends of people working for governments), but on the other leads to creation of parallel societies, where the incoming population brings along the society they strived to escape from. The Don calls these sh***hole societies. Why bring the f***ing thing here, why not leave it where you escaped from.

But the real betrayal of the native population happens when all those unregulated migrants are afforded immediate right to social security, full access to NHS and other aspects of state support, services that they have not paid one penny in support before accessing that particular government funded trough. And then the parasitic growth of their "family and extended family" comes along under the banner of "human rights".

This is the damnation of the whole of Western Civilisation which had been hollowed out from within by the most devious layer of parasitic growth, the government apparatus. The people we pay for under the auspices that they are doing some work for us, are enforcing things that treat the income generators, the tax paying society as serfs whose primary function in life is to support the parasites (immigrants) and parasite enablers (government).

The laws of biology and physics and whatever else say that the host that is being parasitised upon, cannot support the endless growth of the parasites attached upon it. The unfortunate host will eventually die.

Understanding of this concept is most certainly within mental capabilities of all those employed as the "governing classes " that we are paying for through our taxes.

Until such time when legislation is enacted that each and every individual member of "government classes " is made to pay, on an indemnity basis, through financial damages, forced labour, organs stripping or custodial penalties, for every penny (or cent, sorry, yanks), of damage they inflict on us taxpayers, we are all just barking.

Skip Intro , July 3, 2019 at 4:49 pm

This piece does an admirable job conflating globalisation and the ills caused by the neoliberal capture of social democratic parties/leaders. Did people just happen to lose hope, or were they actively betrayed? We are left to guess.

"negative effects of globalisation: foreign competition, factory closures, persistent unemployment, stagnating purchasing power, deteriorating infrastructures and public services"

Note that these ills could also be laid at the feet of the austerity movement, and the elimination/privatisation of National Industrial Policy, both cornerstones of the neoliberal infestation.

Summer , July 3, 2019 at 5:56 pm

Not only is globalization not new, all of the issues that come with it are old news.
All of it.

Part of the problem is that the global economic order is still in service to the same old same old. They have to rebrand every so often to keep the comfortable even more comfortable.

Those tasked with keeping the comfortable more comfortable have to present this crap as "new ideas" for their own careerism or actually do not realize they haven't espoused a new idea in 500 years.

K Lee , July 5, 2019 at 9:12 am

Putin's recent interview with Financial Times editor offers a clear-eyed perspective on our changing global structure:

"What is happening in the West? What is the reason for the Trump phenomenon, as you said, in the US? What is happening in Europe as well? The ruling elites have broken away from the people. The obvious problem is the gap between the interests of the elites and the overwhelming majority of the people.

Of course, we must always bear this in mind. One of the things we must do in Russia is never to forget that the purpose of the operation and existence of any government is to create a stable, normal, safe and predictable life for the people and to work towards a better future.

You know, it seems to me that purely liberal or purely traditional ideas have never existed. Probably, they did once exist in the history of humankind, but everything very quickly ends in a deadlock if there is no diversity. Everything starts to become extreme one way or another.

Various ideas and various opinions should have a chance to exist and manifest themselves, but at the same time interests of the general public, those millions of people and their lives, should never be forgotten. This is something that should not be overlooked.

Then, it seems to me, we would be able to avoid major political upheavals and troubles. This applies to the liberal idea as well. It does not mean (I think, this is ceasing to be a dominating factor) that it must be immediately destroyed. This point of view, this position should also be treated with respect.

They cannot simply dictate anything to anyone just like they have been attempting to do over the recent decades. Diktat can be seen everywhere: both in the media and in real life. It is deemed unbecoming even to mention some topics. But why?

For this reason, I am not a fan of quickly shutting, tying, closing, disbanding everything, arresting everybody or dispersing everybody. Of course, not. The liberal idea cannot be destroyed either; it has the right to exist and it should even be supported in some things. But you should not think that it has the right to be the absolute dominating factor. That is the point. Please." ~ Vladmir Putin

https://www.ft.com/content/878d2344-98f0-11e9-9573-ee5cbb98ed36

He's talking about the end of neoliberalism, the economic fascism that has gripped the world for over 40 years:

"If you're not willing to kill everybody who has a different idea than yourself, you cannot have Frederick Hayek's free market. You cannot have Alan Greenspan or the Chicago School, you cannot have the economic freedom that is freedom for the rentiers and the FIRE (finance, insurance, real estate) sector to reduce the rest of the economy to serfdom." ~ Michael Hudson

Let's get back to using fiscal policy for public purpose again, to granting nations their right to self-determination and stopping the latest desperate neoliberal attempt to change international norms by installing fascist dictators (while pretending they are different) in order to move the world backwards to a time when "efforts to institutionalize standards of human and civil rights were seen as impingements on sovereignty, back to the days when no one gave a second thought to oppressed peoples."

http://tothepointanalyses.com/making-progressives-the-enemy/?fbclid=IwAR0ebXAngJpSZY0-WdB-zOgfqWnGsmYzqkYMP4A69kqbHrTI6WqjSpWM4Ow

kristiina , July 4, 2019 at 2:47 am

Very interesting article, and even more interesting conversation! There is a type of argument that very accurately points out some ills that need addressing, and then goes on to spout venom on the only system that might be able to address those ills.

It may be that the governing classes are making life easy for themselves. How to address that is the hard and difficult issue. Most of the protection of the small people comes from government. Healthcare, schools, roads, water etc.(I'm in scandinavia).

If the government crumbles, the small people have to leave. The most dreadful tyranny is better than a failed state with warring factions.

The only viable way forward is to somehow improve the system while it is (still) running. But this discussion I do not see anywhere.

If the discussion does not happen, there will not be any suggestions for improvement, so everything stays the same. Change is inevitable – it what state it will catch us is the important thing. A cashier at a Catalonian family vineyard told me the future is local and global: the next level from Catalonia will be EU. What are the steps needed to go there?

SteveB , July 4, 2019 at 5:54 am

Same old, Same old. Government is self-corrupting and is loath to change. People had enough July fourth 1776.

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness."

FWIW: The fireworks we watch every Fourth of July holiday are symbolic!!!!

John , July 4, 2019 at 5:43 pm

The cashier seems to be envisioning a neoliberal paradise where the nation-state no longer exists. But who, then, collects the taxes that will pay for infrastructure, healthcare, education, public housing, and unemployment insurance? The European Parliament?

Will Germans and Finns be willing to pay high taxes in order to pay for those services for Greeks and Spaniards?

Look at the unemployment rate in Greece the Germans would simply say that the Greeks are lazy parasites and don't want to work (rather than understand that the economic conditions don't allow for job creation), and they would vote for MEPs that vote to cut taxes and welfare programs.

But maybe this was the plan all along you create this neoliberal paradise, and slowly but surely, people will dismantle all but the bare bones of the welfare state.

John , July 4, 2019 at 5:35 pm

I believe that one of the fundamental flaws in the logic behind the EU is this assumption of mobility. Proponents of the EU imagine society to be how it is described in economics textbooks: a bunch of individual actors seeking to maximize their incomes that don't seem to exist in any geographic context. The reality is that people are born into families and communities that speak a language. Most of them probably don't want to just pack up all of their things, relocate, and leave their family and home behind every time they get a new job. People throughout history have always had a very strong connection to the land on which they were raised and the society into which they were brought up; more accurately, for most of human history, this formed the entire existence, the entire universe, of most people (excluding certain oppressed groups, such as slaves or the conquered).

Human beings are not able to move as freely as capital. While euros in Greece can be sent to and used instantly in Germany, it is not so easy for a Greek person to leave the society that their ancestors have lived in for thousands of years and move to a new country with a new culture and language. For privileged people that get to travel, this doesn't sound so bad, but for someone whose family has lived in the same place for centuries and never learned to speak another language, this experience would be extremely difficult. For many people over the age of 25, it might not even be a life worth living.

In the past, economic difficulties would lead to a depreciation of a nation's currency and inflation. But within the current structure of the Eurozone, it results in deflation as euros escape to the core countries (mainly Germany) and unemployment. Southern Europeans are expected to leave everything they have ever known behind and move to the countries where there is work, like Germany or Holland. Maybe for a well-educated worldly 18 year old, that's not so bad, but what about a newly laid-off working class 35 year-old with a wife and kids and no college degree? He's supposed to just pick up his family and leave his parents and relatives behind, learn German, and spend the rest of his life and Germany? His kids now have to be German? Would he even be able to get a job there, anyway? Doing what? And how is he supposed to stop this from happening, how is he supposed to organize politically to keep jobs at home? The Greek government can hardly do anything because the IMF, ECB, and European Commission (all unelected officials) call the shots and don't give them any fiscal breathing room (and we saw what happened the last time voters tried to assert their autonomy in the bailout deal referendum), and the European Parliament doesn't have a serious budget to actually do anything.

I'm surprised more people don't vote for neo-fascist parties like the Golden Dawn. Ordinary liberal politics has completely failed them.

[Jul 06, 2019] There is a fundamental difficulty here which progressives have not fully faced. It is that more open trade and welcoming immigration policies are, on the one hand, a progressive and moral good (we should feel solidarity with people from the global south; it feels wrong to bar them from our countries and stop them from benefiting from our economies)

Notable quotes:
"... On the other hand, more open immigration policies will mean more workers, which will of course take jobs away, especially from the poorest in our own societies. Similarly, more open trade will more jobs in poorer countries and fewer jobs here, again taking jobs, especially from the poorest in our societies. this is morally wrong: we should feel solidarity with our own poor. ..."
"... Further, more open immigration policies are what capitalism 'wants': more workers will necessarily drive wages down, and so produce greater profits for corporations and the rich, and therefore greater inequality in our society overall. ..."
Nov 10, 2016 | discussion.theguardian.com

HuckleAndLowly, 10 Nov 2016 10:03

There is a fundamental difficulty here which progressives have not fully faced. It is that more open trade and welcoming immigration policies are, on the one hand, a progressive and moral good (we should feel solidarity with people from the global south; it feels wrong to bar them from our countries and stop them from benefiting from our economies).

On the other hand, more open immigration policies will mean more workers, which will of course take jobs away, especially from the poorest in our own societies. Similarly, more open trade will more jobs in poorer countries and fewer jobs here, again taking jobs, especially from the poorest in our societies. this is morally wrong: we should feel solidarity with our own poor.

Further, more open immigration policies are what capitalism 'wants': more workers will necessarily drive wages down, and so produce greater profits for corporations and the rich, and therefore greater inequality in our society overall. Comfortably well-off liberals can appear and feel progressive by supporting more open immigration, while in fact this support aligns with capitalist policies that benefit them and exploit those who are worse off.

We need a progressive movement that can resolve this and square the circle.

ydobon -> HuckleAndLowly

Well said. ,

Well said.

olivercotts -> HuckleAndLowly

'We need a progressive movement that can resolve this and square the circle'.

A good point, but any idea how to progress?

HuckleAndLowly -> olivercotts

Honestly, no, beyond stressing the fact that more open and welcoming immigration policies are not unalloyed morally good things: they lead to lower wages for the poor and middle class, and lead to greater inequality, since lower wages translate into greater profits for corporations and their owners.

Perhaps if a progressive argument towards tempering and controlling immigration can be made, based on the fact that open immigration leads to greater inequality and in the end benefits the 1% the most, then we can get some sort of progress.

[Jul 05, 2019] Globalisation- the rise and fall of an idea that swept the world - World news by Nikil Saval

Highly recommended!
Globalization was simply the politically correct term for neocolonialism.
Jul 14, 2017 | www.theguardian.com

... ... ...

Over the last two years, a different, in some ways unrecognizable Larry Summers has been appearing in newspaper editorial pages. More circumspect in tone, this humbler Summers has been arguing that economic opportunities in the developing world are slowing, and that the already rich economies are finding it hard to get out of the crisis. Barring some kind of breakthrough, Summers says, an era of slow growth is here to stay.

In Summers's recent writings, this sombre conclusion has often been paired with a surprising political goal: advocating for a "responsible nationalism". Now he argues that politicians must recognise that "the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global good".

One curious thing about the pro-globalisation consensus of the 1990s and 2000s, and its collapse in recent years, is how closely the cycle resembles a previous era. Pursuing free trade has always produced displacement and inequality – and political chaos, populism and retrenchment to go with it. Every time the social consequences of free trade are overlooked, political backlash follows. But free trade is only one of many forms that economic integration can take. History seems to suggest, however, that it might be the most destabilising one.

... ... ...

The international systems that chastened figures such as Keynes helped produce in the next few years – especially the Bretton Woods agreement and the General Agreement on Tariffs and Trade (Gatt) – set the terms under which the new wave of globalisation would take place.

The key to the system's viability, in Rodrik's view, was its flexibility – something absent from contemporary globalisation, with its one-size-fits-all model of capitalism. Bretton Woods stabilised exchange rates by pegging the dollar loosely to gold, and other currencies to the dollar. Gatt consisted of rules governing free trade – negotiated by participating countries in a series of multinational "rounds" – that left many areas of the world economy, such as agriculture, untouched or unaddressed. "Gatt's purpose was never to maximise free trade," Rodrik writes. "It was to achieve the maximum amount of trade compatible with different nations doing their own thing. In that respect, the institution proved spectacularly successful."

Partly because Gatt was not always dogmatic about free trade, it allowed most countries to figure out their own economic objectives, within a somewhat international ambit. When nations contravened the agreement's terms on specific areas of national interest, they found that it "contained loopholes wide enough for an elephant to pass", in Rodrik's words. If a nation wanted to protect its steel industry, for example, it could claim "injury" under the rules of Gatt and raise tariffs to discourage steel imports: "an abomination from the standpoint of free trade". These were useful for countries that were recovering from the war and needed to build up their own industries via tariffs – duties imposed on particular imports. Meanwhile, from 1948 to 1990, world trade grew at an annual average of nearly 7% – faster than the post-communist years, which we think of as the high point of globalisation. "If there was a golden era of globalisation," Rodrik has written, "this was it."

Gatt, however, failed to cover many of the countries in the developing world. These countries eventually created their own system, the United Nations conference on trade and development (UNCTAD). Under this rubric, many countries – especially in Latin America, the Middle East, Africa and Asia – adopted a policy of protecting homegrown industries by replacing imports with domestically produced goods. It worked poorly in some places – India and Argentina, for example, where the trade barriers were too high, resulting in factories that cost more to set up than the value of the goods they produced – but remarkably well in others, such as east Asia, much of Latin America and parts of sub-Saharan Africa, where homegrown industries did spring up. Though many later economists and commentators would dismiss the achievements of this model, it theoretically fit Larry Summers's recent rubric on globalisation: "the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global good."

The critical turning point – away from this system of trade balanced against national protections – came in the 1980s. Flagging growth and high inflation in the west, along with growing competition from Japan, opened the way for a political transformation. The elections of Margaret Thatcher and Ronald Reagan were seminal, putting free-market radicals in charge of two of the world's five biggest economies and ushering in an era of "hyperglobalisation". In the new political climate, economies with large public sectors and strong governments within the global capitalist system were no longer seen as aids to the system's functioning, but impediments to it.

Not only did these ideologies take hold in the US and the UK; they seized international institutions as well. Gatt renamed itself as the World Trade Organization (WTO), and the new rules the body negotiated began to cut more deeply into national policies. Its international trade rules sometimes undermined national legislation. The WTO's appellate court intervened relentlessly in member nations' tax, environmental and regulatory policies, including those of the United States: the US's fuel emissions standards were judged to discriminate against imported gasoline, and its ban on imported shrimp caught without turtle-excluding devices was overturned. If national health and safety regulations were stricter than WTO rules necessitated, they could only remain in place if they were shown to have "scientific justification".

The purest version of hyperglobalisation was tried out in Latin America in the 1980s. Known as the "Washington consensus", this model usually involved loans from the IMF that were contingent on those countries lowering trade barriers and privatising many of their nationally held industries. Well into the 1990s, economists were proclaiming the indisputable benefits of openness. In an influential 1995 paper, Jeffrey Sachs and Andrew Warner wrote: "We find no cases to support the frequent worry that a country might open and yet fail to grow."

But the Washington consensus was bad for business: most countries did worse than before. Growth faltered, and citizens across Latin America revolted against attempted privatisations of water and gas. In Argentina, which followed the Washington consensus to the letter, a grave crisis resulted in 2002 , precipitating an economic collapse and massive street protests that forced out the government that had pursued privatising reforms. Argentina's revolt presaged a left-populist upsurge across the continent: from 1999 to 2007, leftwing leaders and parties took power in Brazil, Venezuela, Bolivia and Ecuador, all of them campaigning against the Washington consensus on globalisation. These revolts were a preview of the backlash of today.


Rodrik – perhaps the contemporary economist whose views have been most amply vindicated by recent events – was himself a beneficiary of protectionism in Turkey. His father's ballpoint pen company was sheltered under tariffs, and achieved enough success to allow Rodrik to attend Harvard in the 1970s as an undergraduate. This personal understanding of the mixed nature of economic success may be one of the reasons why his work runs against the broad consensus of mainstream economics writing on globalisation.

"I never felt that my ideas were out of the mainstream," Rodrik told me recently. Instead, it was that the mainstream had lost touch with the diversity of opinions and methods that already existed within economics. "The economics profession is strange in that the more you move away from the seminar room to the public domain, the more the nuances get lost, especially on issues of trade." He lamented the fact that while, in the classroom, the models of trade discuss losers and winners, and, as a result, the necessity of policies of redistribution, in practice, an "arrogance and hubris" had led many economists to ignore these implications. "Rather than speaking truth to power, so to speak, many economists became cheerleaders for globalisation."

In his 2011 book The Globalization Paradox , Rodrik concluded that "we cannot simultaneously pursue democracy, national determination, and economic globalisation." The results of the 2016 elections and referendums provide ample testimony of the justness of the thesis, with millions voting to push back, for better or for worse, against the campaigns and institutions that promised more globalisation. "I'm not at all surprised by the backlash," Rodrik told me. "Really, nobody should have been surprised."

But what, in any case, would "more globalisation" look like? For the same economists and writers who have started to rethink their commitments to greater integration, it doesn't mean quite what it did in the early 2000s. It's not only the discourse that's changed: globalisation itself has changed, developing into a more chaotic and unequal system than many economists predicted. The benefits of globalisation have been largely concentrated in a handful of Asian countries. And even in those countries, the good times may be running out.

Statistics from Global Inequality , a 2016 book by the development economist Branko Milanović, indicate that in relative terms the greatest benefits of globalisation have accrued to a rising "emerging middle class", based preponderantly in China. But the cons are there, too: in absolute terms, the largest gains have gone to what is commonly called "the 1%" – half of whom are based in the US. Economist Richard Baldwin has shown in his recent book, The Great Convergence, that nearly all of the gains from globalisation have been concentrated in six countries.

Barring some political catastrophe, in which rightwing populism continued to gain, and in which globalisation would be the least of our problems – Wolf admitted that he was "not at all sure" that this could be ruled out – globalisation was always going to slow; in fact, it already has. One reason, says Wolf, was that "a very, very large proportion of the gains from globalisation – by no means all – have been exploited. We have a more open world economy to trade than we've ever had before." Citing The Great Convergence, Wolf noted that supply chains have already expanded, and that future developments, such as automation and the use of robots, looked to undermine the promise of a growing industrial workforce. Today, the political priorities were less about trade and more about the challenge of retraining workers , as technology renders old jobs obsolete and transforms the world of work.

Rodrik, too, believes that globalisation, whether reduced or increased, is unlikely to produce the kind of economic effects it once did. For him, this slowdown has something to do with what he calls "premature deindustrialisation". In the past, the simplest model of globalisation suggested that rich countries would gradually become "service economies", while emerging economies picked up the industrial burden. Yet recent statistics show the world as a whole is deindustrialising. Countries that one would have expected to have more industrial potential are going through the stages of automation more quickly than previously developed countries did, and thereby failing to develop the broad industrial workforce seen as a key to shared prosperity.

For both Rodrik and Wolf, the political reaction to globalisation bore possibilities of deep uncertainty. "I really have found it very difficult to decide whether what we're living through is a blip, or a fundamental and profound transformation of the world – at least as significant as the one that brought about the first world war and the Russian revolution," Wolf told me. He cited his agreement with economists such as Summers that shifting away from the earlier emphasis on globalisation had now become a political priority; that to pursue still greater liberalisation was like showing "a red rag to a bull" in terms of what it might do to the already compromised political stability of the western world.

Rodrik pointed to a belated emphasis, both among political figures and economists, on the necessity of compensating those displaced by globalisation with retraining and more robust welfare states. But pro-free-traders had a history of cutting compensation: Bill Clinton passed Nafta, but failed to expand safety nets. "The issue is that the people are rightly not trusting the centrists who are now promising compensation," Rodrik said. "One reason that Hillary Clinton didn't get any traction with those people is that she didn't have any credibility."

Rodrik felt that economics commentary failed to register the gravity of the situation: that there were increasingly few avenues for global growth, and that much of the damage done by globalisation – economic and political – is irreversible. "There is a sense that we're at a turning point," he said. "There's a lot more thinking about what can be done. There's a renewed emphasis on compensation – which, you know, I think has come rather late."

[Jul 05, 2019] Globalization's Wrong Turn by Dani Rodrik

As Noam Chomsky says, the term globalisation has been appropriated by a narrow sector of power and privilege to refer to their version of international integration and it makes sense for them to own the term because anyone who is opposed to their version becomes anti-globalisation -- someone who is primitive and wants to go back to the stone age and that everyone likes international integration but not the investor rights version of it.
In reality globalization was a politically correct term for neocolonialism
Notable quotes:
"... In finance, the change was marked by a fundamental shift in governments' attitudes away from managing capital flows and toward liberalization ..."
Jul 05, 2019 | www.foreignaffairs.com

Globalization is in trouble. A populist backlash, personified by U.S. President Donald Trump, is in full swing. A simmering trade war between China and the United States could easily boil over. Countries across Europe are shutting their borders to immigrants. Even globalization's biggest boosters now concede that it has produced lopsided benefits and that something will have to change .

Today's woes have their roots in the 1990s, when policymakers set the world on its current, hyperglobalist path, requiring domestic economies to be put in the service of the world economy instead of the other way around. In trade, the transformation was signaled by the creation of the World Trade Organization, in 1995. The WTO not only made it harder for countries to shield themselves from international competition but also reached into policy areas that international trade rules had not previously touched: agriculture, services, intellectual property, industrial policy, and health and sanitary regulations. Even more ambitious regional trade deals, such as the North American Free Trade Agreement, took off around the same time.

In finance, the change was marked by a fundamental shift in governments' attitudes away from managing capital flows and toward liberalization. Pushed by the United States and global organizations such as the International Monetary Fund and the Organization for Economic Cooperation and Development, countries freed up vast quantities of short-term finance to slosh across borders in search of higher returns.

At the time, these changes seemed to be based on sound economics. Openness to trade would lead economies to allocate their resources to where they would be the most productive. Capital would flow from the countries where it was plentiful to the countries where it was needed. More trade and freer finance would unleash private investment and fuel global economic growth.

But these new arrangements came with risks that the hyperglobalists did not foresee, although economic theory could have predicted the downside to globalization just as well as it did the upside.

... ... ...

[Jul 05, 2019] The UK public finally realized that the Globalist/Open Frontiers/ Neoliberal crowd are not their friends

Highly recommended!
Notable quotes:
"... The key point, is that this happened in the 1980's – 90's. Vast profit possibilities were opening up through digitalization, corporate outsourcing, globalization and the internet. The globalists urgently wanted that money, and had to have political compliance. They found it in Neoliberalism and hijacked both the Conservative Party and the Labour Party, creating "New Labour" (leader Tony Blair) through classless "modernization" following Margaret Thatcher's lead. ..."
"... Great blast by Jonathan Cook – I feel as if he has read my thoughts about the political system keeping the proles in an Orwellian state of serfdom for plunder and abuse under the guise of “democracy” and “freedom”. ..."
"... But the ideas of the Chicago School in cohorts with the Frankfurters and Tavistockers were already undermining our hopeful vision of the world while the think tanks at the foundations, councils and institutes were flooding the academies with the doctrines of hardhead uncompromising Capitalism to suck the blood off the proles into anaemic immiseration and apathetic insouciance. ..."
"... With the working class defeated and gone, where is the spirit of resistance to spring from? Not from the selfishness of the new generation of smartphone addicts whose world has shrunk to the atomic MEism and who refuse to open their eyes to what is staring in their face: debt slavery, for life. Maybe the French can do it again. Allez Gilets Jaunes! ..."
Jul 05, 2019 | www.unz.com

Miro23 says: July 5, 2019 at 11:09 am GMT 400 Words

This is a very good article on UK politics, but I would have put more emphasis on the background. Where we are today has everything to do with how we got here.

The UK has this basic left/right split (Labour/Conservative) reaching far back into its class based history. Sad to say, but within 5 seconds a British person can determine the class of the person they are dealing with (working/ middle/ upper) and act accordingly – referencing their own social background.

Margaret Thatcher was a lower middle class grocer's daughter who gained a rare place at Oxford University (on her own high intellectual merits), and took on the industrial wreckers of the radical left (Arthur Scargill etc.). She consolidated her power with the failure of the 1984-85 Miner's Strike. She introduced a new kind of Conservatism that was more classless and open to the talents, adopting free market Neoliberalism along with Ronald Reagan. A large section of the aspirational working class went for this (many already had middle class salaries) and wanted that at least their children could join the middle class through the university system.

The key point, is that this happened in the 1980's – 90's. Vast profit possibilities were opening up through digitalization, corporate outsourcing, globalization and the internet. The globalists urgently wanted that money, and had to have political compliance. They found it in Neoliberalism and hijacked both the Conservative Party and the Labour Party, creating "New Labour" (leader Tony Blair) through classless "modernization" following Margaret Thatcher's lead.

The story now, is that the UK public realize that the Globalist/Zionist/SJW/Open Frontiers/ Neoliberal crowd are not their friends . So they (the public) are backtracking fast to find solid ground. In practice this means 1) Leave the Neoliberal/Globalist EU (which has also been hijacked) using Brexit 2) Recover the traditional Socialist Labour Party of working people through Jeremy Corbyn 3) Recover the traditional Conservative Party ( Britain First) through Nigel Farage and his Brexit movement.

Hence the current and growing gulf that is separating the British public from its Zio-Globalist elite + their media propagandists (BBC, Guardian etc.).


Digital Samizdat , says: July 5, 2019 at 12:43 pm GMT

@Miro23

She introduced a new kind of Conservatism that was more classless …

Or just plain anti-working class.

It was actually Thatcher who started the neo-liberal revolution in Britain. To the extent that she refused to finish it, the elites had Tony Blair in the wings waiting to go.

Parfois1 , says: July 5, 2019 at 1:18 pm GMT

Great blast by Jonathan Cook – I feel as if he has read my thoughts about the political system keeping the proles in an Orwellian state of serfdom for plunder and abuse under the guise of “democracy” and “freedom”. Under this system if anyone steps out of line is indeed sidelined for the “anti-semitic” treatment, demonized, vilified and, virtually hanged and quartered on the public square of the mendacious media.

In the good old days, when there was a militant working class and revolting (!) unionism, we would get together at meetings, organize protests and strikes and confront bosses and officialdom. There was camaraderie, solidarity, loyalty and confident defiance that we were fighting for a better world for ourselves and our children – and also for people less fortunate than us in other countries.

But the ideas of the Chicago School in cohorts with the Frankfurters and Tavistockers were already undermining our hopeful vision of the world while the think tanks at the foundations, councils and institutes were flooding the academies with the doctrines of hardhead uncompromising Capitalism to suck the blood off the proles into anaemic immiseration and apathetic insouciance.

... ... ... .

With the working class defeated and gone, where is the spirit of resistance to spring from? Not from the selfishness of the new generation of smartphone addicts whose world has shrunk to the atomic MEism and who refuse to open their eyes to what is staring in their face: debt slavery, for life. Maybe the French can do it again. Allez Gilets Jaunes!

Harbinger , says: July 5, 2019 at 1:47 pm GMT
@Miro23 ic get pissed off and vote in the conservatives who then privatise everything. And this game continues on and on. The British public are literally headless chickens running around not knowing what on earth is going on. They’re not interested in getting to the bottom of why society is the way it is. They’re all too comfortable with their mortgages, cars, holidays twice a year, mobile phones, TV shows and football.

When all of this disappears, then certainly, they will start asking questions, but when that time comes they will be utterly powerless to do anything, as a minority in their own land. Greater Israel will be built when that time comes.

Miro23 , says: July 5, 2019 at 3:05 pm GMT
@Digital Samizdat itants and win – which she did.

No one at the time had much idea about Neoliberalism and none at all about Globalization. This was all in the future.

And it was the British working class who were really cutting their own throats, by wrecking British industry (their future employment), with constant political radicalism and strikes.

https://www.amazon.co.uk/Goodbye-Great-Britain-1976-Crisis/dp/0300057288

[Jul 01, 2019] Globalization is simply a neoliberal economic substitute for colonialism.

Jul 01, 2019 | www.moonofalabama.org

Pft , Jul 1 2019 5:38 utc | 114

Globalization is simply a neoliberal economic substitute for colonialism.

Neoliberals contrary to popular opinion do not believe in self-regulating markets as autonomous entities. They do not see democracy as necessary for capitalism.

The neoliberal globalist world is not a borderless market without nations but a doubled world (economic -global and social- national) . The global economic world is kept safe from democratic national demands for social justice and equality, and in return each nation enjoys cultural freedom.

Neoliberals see democracy as a real problem. Democracy means the unwashed masses can threaten the so called market economy (in fact manipulated and protected markets) with worker demands for living wages and equality and consumer demands for competitive pricing and safe products. Controlling both parties with money prevents that.

In fact, neoliberal thinking is comparable to that of John Maynard Keynes in one respect : "the market does not and cannot take care of itself".

The neoliberal project did not liberate markets so much as protect them by protecting capitalism against the threat of democracy and to reorder the world where borders provide a captive market

Neoliberals insulate the markets by providing safe harbor for capital, free from fear of infringement by policies of progressive taxation or redistribution. They do this by redesigning government, laws, and other institutions to protect the market.

For example the stock market is propped up by the Feds purchases of futures, replacing the plunge protection teams intervention at an even more extreme level. Manipulation of economic statistics by the BLS also serve a similar purpose.

Another example is getting government to accept monopoly capitalism over competitive capitalism and have appointed judges who believe illegal collusion is nothing more than understandable and legal "conscious parallelism"

Now it seems to me the Koch-Soros think tank is an attempt to unify the neoliberal globalist forces which represent factions from international greenies to nationalist protectionists . In other words to repackage and rename neoliberal globalism while keeping its essence. Be interesting to see what they come up with.

As for China opening to private international finance. They already did that but this takes it to a new level. Like I said. Fake wrestling. This was one of the demands in the trade negotiations by Trump. Why take one of your chips off the table if the game is for real?

China was Made in USA (includes the City of London) like the EU and Putins neoliberal Russia.
One day they will get around telling us they are all buddies, or maybe not. I suspect they have a lot of laughs playing us like they do.

I could be wrong but this is more interesting than the official and semi official narratives.


[Jul 01, 2019] Globalism is the transnational, mainly financial and legal architecture (or "system" if you will) through which neliberalim functions

Notable quotes:
"... if the US ever held unipolar control in reality it was briefly during the period after the downfall of the USSR and up until the conquest of Iraq. ..."
"... An economic system, of which the financial system is a part of, is one of the fundamental structures of any society. Societies in today's world are defined at the sovereign state level, and the economic systems are defined by the governments of these states ..."
"... 'Globalism' as discussed in these blogs, in opposition to 'multi-polarity' is not about global commerce, but rather about an effort by a certain group of wealthy elites, primarily centered in London and New York, and commonly referred to as 'Globalists' to transfer the authority for the definition and control of economic systems from sovereign states to a set of international institutions under their control. ..."
"... In doing so they strip the sovereignty from sovereign states, as as already happened with the EU, and create a global dictatorship, under the control of the 'Globalists' and completely isolated from any democratic oversight. A fascist project in the purest sense of fascism. ..."
"... The 'Multi-polar' group of nations are those nations who oppose this fascist project and who are working to maintain and restore the sovereignty of nations. ..."
Jul 01, 2019 | www.moonofalabama.org

donkeytale , Jun 30, 2019 1:38:21 PM | 15

Gzon @ 10 and james @ 1

Stating "globalism" is antithetical to "multipolarity" is a non-sequitor.

Globalism is the financial structure (or "system" if you will) through which capitalist enterprises function. This is complex of course and includes capital markets, corporations, multinational corporations, currency markets, commodities markets, trading agreements. Politicians intervene in the functioning of globalism so there is seldom if ever anything like a globalism free of political influence.

OTOH, "multipolarity" has no structure that I can see. It is an empty vessel, purely a political, statist-inspired idea (whereas globalism is a "thing" which contains political and economic ideas of course but those ideas may or may not be statist in concept depending on the context) which can mean anything to anyone at any point in time.

I guess I would say the term is purely Orwellian. Thus, without reading anything other than James's comment I would guess the author's idea is either nonsensical or propagandistic in nature.

For me, the world became "multipolar" the minute the US invaded Iraq in 2003. The idea that the US wishes to maintain its "unipolar" leadership of the world may be true in the wishful sense of some neocons, however if the US ever held unipolar control in reality it was briefly during the period after the downfall of the USSR and up until the conquest of Iraq.

Today, I view the world as both multipolar and globalist. While many of the political and economic tensions we see result from the disconnects between national political and global economic conditions, I think we must admit if we are honest that many of the more recent tensions are simply the result of Trump's presidency, which has the intended affect of being "a bull in the china shop" of the globalist system.

This is not necessarily a bad thing in theory. Sadly, however, Trump is a geopolitical and foreign policy moron who doesn't know what he is doing beyond enriching himself and creating daily fake news headlines in hopes of being re-elected on behalf of the same global elites he playacts at combatting for his worshipful audience of true believers.

dh-mtl | Jun 30, 2019 3:51:11 PM | 29

gzon , Jun 30, 2019 4:25:58 PM | 33

@donkeytale | Jun 30, 2019 1:38:21 PM | 15 says:

'Globalism is the financial structure (or "system" if you will) through which capitalist enterprises function.'

What B.S.!!

An economic system, of which the financial system is a part of, is one of the fundamental structures of any society. Societies in today's world are defined at the sovereign state level, and the economic systems are defined by the governments of these states , which are supposed to function on behalf of the population of each state, and in democratic states, are also supposed to be under the control of the overall population through their democratic institutions. International institutions are there to coordinate commerce between the different economic systems of sovereign states.

'Globalism' as discussed in these blogs, in opposition to 'multi-polarity' is not about global commerce, but rather about an effort by a certain group of wealthy elites, primarily centered in London and New York, and commonly referred to as 'Globalists' to transfer the authority for the definition and control of economic systems from sovereign states to a set of international institutions under their control.

In doing so they strip the sovereignty from sovereign states, as as already happened with the EU, and create a global dictatorship, under the control of the 'Globalists' and completely isolated from any democratic oversight. A fascist project in the purest sense of fascism.

The 'Multi-polar' group of nations are those nations who oppose this fascist project and who are working to maintain and restore the sovereignty of nations.

@ donkeytale 15

I think the world has always been multipolar, the differences that give the definition coming to (being presented to) the forefront, or being dissimilated, according to choice and circumstance. The globalist direction aims to interweave or merge these differences (cultural and historic, religion, philosophy and so on), or at least bring them under a common control. So the idea that multipolarity represents anything more than increased recognition of various regional power as opposed to recognition of one regional power (say western) as more visible, is not much more than an indication of how global policy will be conducted, i.e. with an emphasis on regional responsibility.

Recent US policy is not aimed at destroying the globalist order, it is a result of the failure of one format of the globalist order, where the global financial order no longer fitted into national or regional economic sense. This was the gfc, and there is simply no way to continue the flow of trade and finance as it existed for the previous decades. The easing of rates across the globe is paliative, it is no solution, you only have to look at national debt levels to understand this, or in Eurozone try target2 differences. The world is now partly funded by negative yielding debt. All of this works contrary to capitalist (in its basic honest philosophy) understanding. In short "something" is going to happen to readjust this circumstance, planned or otherwise. I have watched how in EU the single currency has been used to takeover the traditional national hierarchies (banking, political and to a degree social), but we don't have that sort of framework accepted at global level, only various currency pegs, bilateral arrangements and so on. The IMF and sdr is not much liked. What I have noted is virtual central bank currency is being promoted in several ways, be it the bis just announcing it may become a necessity face to cryptocurrency or similar (with a caveat of harmonising monetary policy) , EU organising a parallel payment system that avoids commercial banks, even Instex is along these lines. Where the US and some others truly stand with regard to this is a different question, as for now it (et al) still enjoy a financial hegemony that is both organised and profitable. Interesting times, I just hope that a major event is not the catalyst for reform, that the various parties can agree to withdraw to more localised structure and agreement if any grand plans meet the resistance or failure that is already partly visible. I doubt that will be allowed though, by the time people really want to take part, there won't be much option left and circumstance will already be already confused and conflictive.

james , Jun 30, 2019 4:27:54 PM | 34
@31 donkeytale.. well, if the usa didn't commit as much paper money as it does to the military complex it runs, i suppose the financial complex where the us$ can be printed ad nauseam might come into question.. the sooner oil isn't pegged to the us$ and etc. etc. happens, the better off the world will be... and, i don't blame the usa people for this.. they are just being used as i see it - much the same here in canada with our politicians thinking the prudent thing to do is to support the status quo.. the problem is the status quo can only go on for so long, before a change inevitably happens...

as for swift - they went along with usa sanctions back in 2011 on iran, but then it was brought to court in europe and overturned... but again - they are back in the same place bowing down to usa exceptionalism... call it what you want.. another system needs to get made if this one that exists is beholden to a special interest group - usa-uk-europe, where others are 2nd rate citizens of the world... same deal imf... these world financial institutions need to be changed to reflect the changes that are taking place... the voting rights of the developed countries are skewed to favour the ones who have been raping and pillaging africa, and etc. etc.. you may not think it matters, but i personally do.. and i don't blame the usa for it..but they are being used as a conduit to further an agenda which is very unbalanced and unfriendly to the world as i see it..

dh-mtl , Jun 30, 2019 5:25:13 PM | 41
donkeytale | Jun 30, 2019 4:17:38 PM | 32

I am afraid that I cannot agree with much of what you said.

Dictatorship, as a governance system, has always failed, and will always fail. The 'Globalists' who grabbed power, and imposed an effective oligarchic dictatorship, in the U.S. in 1980 and the EU since 1990, have clearly demonstrated this fact through the destruction of the economies of the U.S. and much of Europe and the impoverishment of their populations. And since 2001, they have used the U.S. and British military and intelligence services and NATO as their personal bludgeon in order to force the submission of any state that did not voluntarily submit to their project of a 'Global' dictatorship.

Resistance to this 'Globalist' project is at the root of almost all conflicts in the world today. The 'Multi-Polar' nations resisting the 'Globalists', in Ukraine, Syria, North Korea, Venezuela, etc. is one front in this resistance. The other front is the resistance of 'Nationalists' (such as Trump, the Brexiteers, the Yellow Vests, and populists across Europe) to the 'Globalists.

The Trump Presidency is not the cause of tensions in the world today, as you suggest, but rather the symptom. Trump understands that without an industrial base, the U.S. is condemned to becoming the 'India' of the Americas'. The central theme of his actions is to restore the U.S. industrial base and U.S. sovereignty, which have largely been destroyed by the 'Globalists' and their 'Deep State' machine over the past 40 years. The 'Globalists' need only the U.S. military and intelligence services, and care nothing for its population and less for its sovereignty, and thus are fighting Trump every step of the way.

Trump may be coarse and a buffoon, and he may be completely wrong in carrying Israel's water with respect to Iran, but he is just about the only American politician that I see that is working on behalf of the U.S. population rather than on behalf of the 'Globalists'.

Reversing the 'Globalization' that has savaged the U.S. and Europe over the past several decades will not come easily, nor without pain and tensions, and winners and losers. However failure to do so guarantees the likely rapid and long term decline and impoverishment of all populations under 'Globalist' control.

wagelaborer , Jun 30, 2019 5:47:02 PM | 48
dh-mtl @29 explained it well, I thought, but some still don't seem to get it.
It is the difference between the UN, which has a law-based charter which upholds the national sovereignty of each nation and forbids aggression against any sovereign country, and
the WTO, which is a rules-based agreement which forbids any national government to pass laws which interfere in the profits of corporations.
Globalism is the project in which capital has complete freedom to do as it will, while humans and national governments are forbidden such freedom.
Putin and Lavrov frequently point to the difference between international law, which they support, and the "rules-based order" which the US and its partners-in-crime support, in which the rules are used to destroy sovereign countries and enrich the multi-national corporations which strip the planet at will, and go to the cheapest labor countries, with no environmental laws, for their global production lines.
A multi-polar world is one with many sovereign countries, ruled by international law, respected by all, with peaceful relations between all countries.
Globalism is when corporations rule the world, and we continue on the path of destruction of all the natural wealth of the world in the turning of nature into commodities and then trash.
psychohistorian , Jun 30, 2019 6:04:02 PM | 49
@ wagelaborer who wrote
"
Globalism is the project in which capital has complete freedom to do as it will, while humans and national governments are forbidden such freedom.
"
Perfectly stated!

I appreciate you, dh-mtl, bevin and others responding to donkeytale. I have not read the comment because donkeytale is on bypass for me but it is nice to read other commenters taking on donkeytale BS for others to see....thanks

Alexander P , Jun 30, 2019 6:06:09 PM | 50
@41 dh-mtl

Sorry if I need to pick your resopnse to donkeytale apart but there are a lot of inconsistencies in your argument.

The 'Globalists' who grabbed power, and imposed an effective oligarchic dictatorship, in the U.S. in 1980 and the EU since 1990, have clearly demonstrated this fact through the destruction of the economies of the U.S. and much of Europe and the impoverishment of their populations.

You seem to imply that the 'globalists' (illuminati, Zionist bankers etc., etc.) did not exist or had power before the 1980s, which could not be further from the truth. There are several reasons why neo-liberalism took hold in the 1980s, creating the economic narrative and agenda of today, none of which, are related to some kind of power grab by people that did not hold any power beforehand. The threat of the cold war was waning in the 1980s and elites felt less pressured by local populations potentially becoming 'too' sympathetic to communism anymore. So they began rolling back social policies implemented in the post-war years to counter communism's appeal. Computer technology going mainstream, creating all sorts of economic spillovers to be harnessed by increased open and international trade was another reason, there were many more. But the people you call 'globalists' controlled matters much, much earlier than the 1980s.

The other front is the resistance of 'Nationalists' (such as Trump, the Brexiteers, the Yellow Vests, and populists across Europe) to the 'Globalists.

If there truly were such politicians as 'nationalists' who somehow only hold the best interest of their native people at heart, then why is that most European populists cosy up to Israel? None of them have tried to reclaim control over their Central Banks and in the case of i.e. Italy, do they try to break free from the Euro? Why are Polish nationalists rabidly supporting the build up of US arms on their territory? I think it is about time to see beyond this silly dichotomy of 'Globalist' vs 'Nationalist', at least while these Nationalists do nothing substantial to actually help their lot and further squeeze the lower classes of their countries in good neo-liberal fashion, same as their Globalist political 'opponents' they claim to oppose.

Trump may be coarse and a buffoon, and he may be completely wrong in carrying Israel's water with respect to Iran, but he is just about the only American politician that I see that is working on behalf of the U.S. population rather than on behalf of the 'Globalists'.

So you admit that Trump is essentially a controlled zionist buffoon but at the same time he is working towards restoring US sovereignty on behalf of the people? You mean he worked for the US people when he lowered taxes for the rich even further, creating an ever larger US public debt, and throwing Americans further into debt servitude of private finance? Or do you mean his still open promise to invest large sums in the US crumbling infrastructure? Oh right, he has instead opted to increase defence spending to combat the US many imaginary enemies around the globe.

Look, I agree with you that global neo-liberalism is bad for the vast majority of people on this planet but don't go looking for help from false prophets, such as Trump or other 'nationalists', you will only find yourself completely disappointed before long.

donkeytale , Jun 30, 2019 6:48:21 PM | 58 dh-mtl , Jun 30, 2019 6:50:23 PM | 59
@50 Alexander P

Response to a few of your criticisms.

1. You say 'You seem to imply that the 'globalists' (illuminati, Zionist bankers etc., etc.) did not exist or had power before the 1980s'.

Not at all. They lost power from the mid-1930s to 1980. They regained power with Reagan, followed by Clinton, W, and Obama. You only need to look at any graph that shows when income inequality in the U.S. began to ramp up. The date is clear - 1980.

2. You say. 'If there truly were such politicians as 'nationalists' who somehow only hold the best interest of their native people at heart'.

I didn't say that these 'Nationalists' or 'Populists' hold the best interests of their native peoples at heart. Usually they are only interested in what they see as best for themselves. But there is no doubt that they are resisting the 'Globalists' push to strip their countries of their sovereignty, to transfer their wealth to the 'Globalist' elites, to transfer their industries to wherever labor is the cheapest. I said that this was a 'second front' against the 'Globalists'. And there is no doubt, from the fight that the 'Globalists' are waging against Trump, 'Brexit' and populists and nationalists across Europe, that the 'Globalists' take this 'front' seriously.


3. You say. 'don't go looking for help from false prophets, such as Trump'.

You are right. It is unlikely that Trump will be able to 'Make America Great Again'. At best he may be able to break the 'Globalists' hold on power in the U.S. However, this is a necessary first step if the U.S. is ever to recover wealth and power that it had during the middle of the last century, but which today is rapidly evaporating.

gzon , Jun 30, 2019 7:04:55 PM | 61
I agree with Alexander P that nationalist and populist presentation is often either controlled opposition or a method of splintering and isolating influence. That is not to say there are a lot of public in many countries who are sincere in their sentiment.

Sorry no link, recent :

"As he arrived at the Kempinski hotel lobby last December, journalists scuffled with bodyguards as they tried to get their microphones and cameras close. Despite being jostled, Zanganeh remained calm and waited to deliver a simple message: Iran can’t participate in OPEC’s production cuts as long as it remains under U.S. sanctions and won’t allow other members to steal its rightful market share."

I.E. approval for continued reduced opec oil supply to support prices depends on Iran (?), lower prices otherwise affecting all other producers, and/or Iran is making the case that sanctions are a theft of market share by other producers. The latter has been a part of the cause of hostility in the gulf.

In Germany

"The 2018 report by the Federal Office for the Protection of the Constitution of Germany (Bundesmat fur Verfassungsschutz, BfV), which was released on June 27, 2019 by the Federal Minister of the Interior, Horst Seehofer and Thomas Haldenwang, head of the organization, examines the activities of the intelligence services of the Iranian regime in Germany....

The BfV annual report states: "The central task of the Iranian intelligence services is to spy against opposition movements and confront these movements. In this regard, evidences of state-sponsored terrorism in Europe, which originates in Iran, have intensified during 2018." " etc

is being used by ncr (the article source) to the effect of calling for closure of the Iranian embassy. That aside, the report does show Germany is moving towards, or is willing to, apply pressure on Iran now. France has also given indication that it is not fully behind Iran (reprimand and warning on not respecting jcpoa etc.)


karlof1 , Jun 30, 2019 7:11:31 PM | 65
dh-mtl @59--

You are correct to say inequality began rising again in 1980; however, the rise must be attributed to Carter and Volker--Reagan just continued the process. It seemed odd the GHW Bush initially opposed it as "Voodoo Economics" but readily championed it all as VEEP, making it just a political posture in the nomination race.

donkeytale , Jun 30, 2019 7:44:26 PM | 72
gzon @ 33

Thanks for the excellent response. One thing I failed to take into account is the difference between the EU and the US financial systems so thanks for that corrective explanation.

The Euro represents the biggest failure of the EU from where I sit. Centralised control of the currency and banking systems is a grave error in that construct and the "European Parliament" just seems too silly for me to even contemplate, although I'm sure there is some logical explanation for its existence that I'm missing.

And you bet, I'm also sure the day of reckoning for the global debt overload is fast approaching. What I don't understand is how one form of capitalism (neoliberal) versus another (state managed) makes any difference in how this debt overload developed. China, for instance, has used similar stimulus methods more frequently even than the US since 2008 to keep its economic growth chugging along and certainly way more than the EU, which under stimulated its own economy in response to the recession.

IMHO, Brexit is a forced over the top politicised reaction to this conservative German-led response in light of the fact the UK kept its own currency and banking systems separate and had the means to provide stimulus but didn't under the Tory buffoons in charge.

Grexit made much more sense to me than Brexit for many reasons. I was dismayed when the Greek people failed in their courage after voting in Syriza follow through and tell the Germans to take the Euro and their debt and put it where the sun don't shine.

What I believe people are tending to forget or overlook, such as wagelabourer @ 48 and dh-mtl elsewhere, that while these postwar international re-orderings such as NATO, the UN and the EU are nowhere near perfect, they are also not purely NWO conspiratorial constructs. Rather they were created for a very specific purpose stemming from a lesson of history which seems to have been rather easily tossed aside because of the relative success of these same institutions: that is, clashing nationalisms inevitably lead to major conflict and devastating wars, especially among the major imperialist states.

[Jul 01, 2019] The cover story is that foreign exchange controls and purchases of U.S. securities keep the renminbi's exchange rate low, artificially spurring its exports. The reality, of course, is that these controls protect China from U.S. banks creating free 'keyboard credit' to buy out Chinese companies to buy out Chinese companies or load down its economy with loans to be paid off in renminbi whose value will rise against the deficit-ridden dollar

Jul 01, 2019 | www.moonofalabama.org

karlof1 , Jun 30, 2019 8:50:06 PM | 83

A while ago we discussed the obfuscation of classical economics in order to elevate the Junk Economics of Randian Neoliberalism. And with Trump's Trade War and the 2020 election cycle's start, I think it wise to revisit what's proven to be a timeless Michael Hudson essay from 2010, "America's China Bashing: A Compendium of Junk Economics" , which provided the ground work for the subsequent book he published on the topic.

The following excerpt remains the underlying issue prompting Trump's Trade War with China:

"The cover story is that foreign exchange controls and purchases of U.S. securities keep the renminbi's exchange rate low, artificially spurring its exports. The reality, of course, is that these controls protect China from U.S. banks creating free 'keyboard credit' to buy out Chinese companies to buy out Chinese companies or load down its economy with loans to be paid off in renminbi whose value will rise against the deficit-ridden dollar. It's the Wall Street arbitrage opportunity of the century that banks are pressing for, not the welfare of American workers ."

As the years between have shown, the Chinese aren't fools and probably know more about economics than their politicized US counterparts, Trump especially included.

psychohistorian , Jun 30, 2019 9:12:34 PM | 85

@ William Gruff with the dh-mtl update about "control" during the early part of last century....I agree and thanks

@ karlof1 with the Michael Hudson link.....I put a comment up last night with a quote from Xinhuanet
"
BEIJING, June 30 (Xinhua) -- China on Sunday rolled out revised negative lists for foreign investment market access, introducing greater opening-up and allowing foreign investors to run majority-share-controlling or wholly-owned businesses in more sectors.
"
It makes me worry about how much of "China" will be allowed to be bought/controlled by the private finance folk. I have been wondering about this since 2008 when the US started running the "printing presses" bigly enough to double the deficit in less than 10 years.....I didn't get any of those trillions, did you? At some point I expect there to be a meeting of global "big wigs" who say they own this or that and wonder how that meeting will turn out relative to Bretton Woods.

I still see China throwing out a faux lifeline to the private finance folk that will be reeled in after the transition to a China led world.....want to make it look like the Koch brothers and Soros with their new peace tank are leading the parade.....

[Jun 30, 2019] Trade War Has Damaged U.S. Chip Industry in Ways a Deal May Never Fix - The New York Times

Notable quotes:
"... Mr. Lidow is among the semiconductor executives in the United States who have become concerned that the trade war with China -- particularly the Trump administration's ban on selling chips to some prominent Chinese customers -- won't just squeeze current revenue. He fears that recent events have convinced Chinese companies that American component makers can no longer be seen as dependable partners and are permanently shifting away from them. ..."
"... In May, President Trump ordered American companies on national-security grounds to stop selling components to companies like Huawei , China's big maker of mobile phones and networking equipment. And the administration placed five other Chinese entities on the same blacklist this month, including the computer maker Sugon and three subsidiaries. ..."
"... China has responded by saying it would put together its own "unreliable entities list," including many American tech companies. ..."
"... "The U.S. is in danger of becoming the vendor of last resort for China," said Walden Rhines, chief executive emeritus of Mentor, a unit of Siemens that sells software for designing chips ..."
Jun 30, 2019 | www.nytimes.com

SAN FRANCISCO -- Alex Lidow has sold semiconductors in China for decades, starting at a company, called International Rectifier, that his father and grandfather founded in the Los Angeles area in 1947.

Now Mr. Lidow runs Efficient Power Conversion, which makes chips that manage electrical power in cars and other products. Efficient Power has a strong foothold in China, but has lately run into resistance from customers there that he traces to moves in Washington.

Mr. Lidow is among the semiconductor executives in the United States who have become concerned that the trade war with China -- particularly the Trump administration's ban on selling chips to some prominent Chinese customers -- won't just squeeze current revenue. He fears that recent events have convinced Chinese companies that American component makers can no longer be seen as dependable partners and are permanently shifting away from them.

"In my 40 years in this business, I've had friends in China that viewed me as a trusted supplier," Mr. Lidow said. "They can't now." His experience is part of the fallout affecting the American chip industry, one of the tech sectors hardest hit by the tit-for-tat between the United States and China over trade and national security.

In May, President Trump ordered American companies on national-security grounds to stop selling components to companies like Huawei , China's big maker of mobile phones and networking equipment. And the administration placed five other Chinese entities on the same blacklist this month, including the computer maker Sugon and three subsidiaries.

China has responded by saying it would put together its own "unreliable entities list," including many American tech companies.

Even if a new trade deal eases tensions -- Mr. Trump is set to meet with President Xi Jinping of China in Osaka, Japan, on Saturday -- American chip executives and others said lasting damage had already been done. They said Chinese officials and companies would step up efforts to design and make more chips domestically. And Chinese customers seem likely to turn to vendors from countries like Japan, South Korea and Taiwan if no homegrown chips are available.

"The U.S. is in danger of becoming the vendor of last resort for China," said Walden Rhines, chief executive emeritus of Mentor, a unit of Siemens that sells software for designing chips

Already, big American chip makers have taken a financial hit from the China bans. Micron Technology, which sells two of the most widely used varieties of memory chips, disclosed Tuesday that the Huawei ban had lowered sales in its most recent quarter by nearly $200 million. Huawei is Micron’s largest customer, accounting for around 13 percent of its revenue.

[Jun 30, 2019] The Art Of The Deal Vs. The Art Of War by Lance Roberts

Notable quotes:
"... "The problem, is that China knows time is short for the President and subsequently there is 'no rush' to conclude a 'trade deal' for several reasons: ..."
"... The pressure is on the Trump Administration to conclude a "deal," not on China. Trump needs a deal done before the 2020 election cycle AND he needs the markets and economy to be strong. ..."
"... corporate profits continued to come under pressure. As noted previously, corporate profits have declined over the last two quarters and are at the same level as in 2014 with the stock market higher by almost 60%. ..."
"... But, if you think China is going to acquiesce any time soon to Trump's demands, you haven't been paying attention. China has launched a national call in their press to unify support behind China's refusal to give into Trump's demands. To wit: ..."
"... "Lying behind the trade feud is America's intention to stifle China's development. The U.S. wants to be a permanent leader in the world, and there is no way for China to avoid the 'storm' through compromise. ..."
Jun 30, 2019 | www.zerohedge.com

Authored by Lance Roberts via RealInvestmentAdvice.com,

... ... ...

By agreeing to continue talks without imposing more tariffs on China, China gains ample running room to continue to adjust for current tariffs to lessen their impact. More importantly, Trump gave up a major bargaining chip – Huawei.

"One of the things I will allow, however, is -- a lot of people are surprised we send and we sell to Huawei a tremendous amount of product that goes into a lot of the various things that they make -- and I said that that's OK, that we will keep selling that product."

No, a lot of people weren't surprised, just Trump as there has been pressure applied by U.S. technology firms to lift the ban on Huawei. While he may have appeased his corporate campaign donors for now, Trump gave up one of the more important "pain points" on China's economy.

This gives China much needed room to run.

Let's review what we said a couple of months ago as to why their will ultimately be no deal.

"The problem, is that China knows time is short for the President and subsequently there is 'no rush' to conclude a 'trade deal' for several reasons:

  1. China is playing a very long game. Short-term economic pain can be met with ever-increasing levels of government stimulus. The U.S. has no such mechanism currently, but explains why both Trump and Vice-President Pence have been suggesting the Fed restarts QE and cuts rates by 1%. (Update: Trump says the U.S. should have Mario Draghi at the helm of U.S. monetary policy.)
  2. The pressure is on the Trump Administration to conclude a "deal," not on China. Trump needs a deal done before the 2020 election cycle AND he needs the markets and economy to be strong. If the markets and economy weaken because of tariffs, which are a tax on domestic consumers and corporate profits, as they did in 2018, the risk off electoral losses rise. China knows this and are willing to 'wait it out' to get a better deal.
  3. As I have stated before, China is not going to jeopardize its 50 to 100-year economic growth plan on a current President who will be out of office within the next 5-years at most. It is unlikely, the next President will take the same hard line approach on China that President Trump has, so agreeing to something that is unlikely to be supported in the future is unlikely. It is also why many parts of the trade deal already negotiated don't take effect until after Trump is out of office when those agreements are unlikely to be enforced.

In the meantime, as noted in #3 above, corporate profits continued to come under pressure. As noted previously, corporate profits have declined over the last two quarters and are at the same level as in 2014 with the stock market higher by almost 60%.

... ... ...

But, if you think China is going to acquiesce any time soon to Trump's demands, you haven't been paying attention. China has launched a national call in their press to unify support behind China's refusal to give into Trump's demands. To wit:

"Lying behind the trade feud is America's intention to stifle China's development. The U.S. wants to be a permanent leader in the world, and there is no way for China to avoid the 'storm' through compromise.

History proves that compromise only leads to further dilemmas. During previous trade tensions between the U.S. and Japan, Japan made concessions. As a result, its political stability and economic development were adversely affected, with structural reform being suspended and hi-tech companies being severely damaged.

China, with a population of 1.4 billion, is the world's largest manufacturing base. Industrial upgrading and hi-tech innovation are crucial to China's economic development. China needs to leave more resources to its descendants by protecting the environment, and reaping the dividends of further opening-up. These are the core interests of China, and it will never give them up.

The only way for a country to win a war is through development, not compromise. To achieve development, China will open its door wider to the world and fight to the end."

These are Xi Jinping's mandates, dictated directly from his party, for the meeting with the United States president in Osaka.

The only possible outcome for Trump was exactly what happened. Nothing. Just an agreement to talk more.

While Trump may be following his "Art Of The Deal" tactics, Xi is clearly operating on the foundation of Sun Tzu's "The Art Of War."

"If your enemy is secure at all points, be prepared for him. If he is in superior strength, evade him. I f your opponent is temperamental, seek to irritate him. Pretend to be weak, that he may grow arrogant. If he is taking his ease, give him no rest. If his forces are united, separate them. If sovereign and subject are in accord, put division between them. Attack him where he is unprepared, appear where you are not expected. "

China has been attacking the "rust-belt" states, which are crucial to Trump's 2020 re-election, states with specifically targeted tariffs. As noted by MarketWatch:

"China has lashed back with tariffs on $110 billion in American goods, focusing on agricultural products in a direct and painful shot at Trump supporters in the U.S. farm belt."

While Trump is operating from a view that was a ghost-written, former best-seller, in the U.S. popular press, Xi is operating from a centuries-old blueprint for victory in battle.

China clearly won this round, and the pressure is now squarely on Trump to get a deal done before the 2020 election.

That isn't likely going to happen.

[Jun 30, 2019] The Saker interviews A.B. Abrams about the geostrategic developments in Asia by The Saker

Notable quotes:
"... " China by contrast has historically conducted statecraft based on the concept of a civilization state – under which its strength is not measured by the weakness and subjugation of others but by its internal achievements. " ..."
"... In my view the Usa had an excellent opportunity to enact in a positive way after WW2 but blew it. The main reason was the failure to live up to the above quoted characterisation of the Chinese. To encourage potential achievers in the best sense of the word. ..."
"... Instead the Us oligarchy held back independent and creative thinking and brainwashed the population, in a way that weakened them. Jfk tried to encourage his countrymen but other forces prevailed. ..."
Jun 30, 2019 | www.unz.com

A.B. Abrams: In the introduction to this work I highlight that a fundamental shift in world order was facilitated by the modernization and industrialization of two Eastern nations – Japan under the Meiji Restoration and the USSR under the Stalinist industrialization program. Before these two events the West had retained an effective monopoly on the modern industrial economy and on modern military force. Russia's image is still affected by the legacy of the Soviet Union – in particular the way Soviet proliferation of both modern industries and modern weapons across much of the region was key to containing Western ambitions in the Cold War. Post-Soviet Russia has a somewhat unique position – with a cultural heritage influenced by Mongolia and Central Asia as well as by Europe. Politically Russia remains distinct from the Western Bloc, and perceptions of the country in East Asia have been heavily influenced by this. Perhaps today one the greatest distinctions is Russia's eschewing of the principle of sovereignty under international law and its adherence to a non-interventionist foreign policy. Where for example the U.S., Europe and Canada will attempt to intervene in the internal affairs of other parties – whether by cutting off parts for armaments , imposing economic sanctions or even launching military interventions under humanitarian pretexts – Russia lacks a history of such behavior which has made it a welcome presence even for traditionally Western aligned nations such as the Philippines, Indonesia and South Korea.

While the Western Bloc attempted to isolate the USSR from East and Southeast Asia by supporting the spread of anticommunist thought, this pretext for shunning Russia collapsed in 1991. Today the West has had to resort to other means to attempt to contain and demonize the country – whether labelling it a human rights abuser or threatening its economic and defense partners with sanctions and other repercussions. The success of these measures in the Asia-Pacific has varied – but as regional economies have come to rely less on the West for trade and grown increasingly interdependent Western leverage over them and their foreign policies has diminished.

Even when considered as a Western nation, the type of conservative Western civilization which Russia may be seen to represent today differs starkly from that of Western Europe and North America. Regarding a Russia Pivot to Asia, support for such a plan appears to have increased from 2014 when relations with the Western Bloc effectively broke down. Indeed, the Russia's future as a pacific power could be a very bright one – and as part of the up and coming northeast Asian region it borders many of the economies which appear set to dominate in the 21 st century – namely China, Japan and the Koreas. Peter the Great is known to have issued in a new era of Russian prosperity by recognizing the importance of Europe's rise and redefining Russia as a European power – moving the capital to St Petersburg. Today a similar though perhaps less extreme pivot Eastwards towards friendlier and more prosperous nations may be key to Russia's future.

The Saker: We hear many observers speak of an informal but very profound and even game-changing partnership between Putin's Russia and Xi's China. The Chinese even speak of a " strategic comprehensive partnership of coordination for the new era ". How would you characterize the current relationship between these two countries and what prospects do you see for a future Russian-Chinese partnership?

A.B. Abrams: A Sino-Russian alliance has long been seen in both the U.S. and in Europe as one of the greatest threats to the West's global primacy and to Western-led world order. As early as 1951 U.S. negotiators meeting with Chinese delegations to end the Korean War were instructed to focus on the differences in the positions of Moscow and Beijing in an attempt to form a rift between the two. Close Sino-Soviet cooperation seriously stifled Western designs for the Korean Peninsula and the wider region during that period, and it was repeatedly emphasized that the key to a Western victory was to bring about a Sino-Soviet split. Achieving this goal by the early 1960s and bringing the two powers very near to a total conflict significantly increased prospects for a Western victory in the Cold War, with the end of the previously united front seriously undermining nationalist and leftist movements opposing Western designs from Africa and the Middle East to Vietnam and Korea. Both states learned the true consequences of this in the late 1980s and early 1990s when there was a real risk of total collapse under Western pressure. Attempts to bring an end to China's national revolution through destabilization failed in 1989, although the USSR was less fortunate and the results for the Russian population in the following decade were grave indeed.

Today the Sino-Russian partnership has become truly comprehensive, and while Western experts from Henry Kissinger to the late Zbigniew Brzezinski among others have emphasized the importance of bringing about a new split in this partnership this strategy remains unlikely to work a second time. Both Beijing and Moscow learned from the dark period of the post-Cold War years that the closer they are together the safer they will be, and that any rift between them will only provide their adversaries with the key to bringing about their downfall. It is difficult to comprehend the importance of the Sino-Russian partnership for the security of both states without understanding the enormity of the Western threat – with maximum pressure being exerted on multiple fronts from finance and information to military and cyberspace. Where in the early 1950s it was only the Soviet nuclear deterrent which kept both states safe from very real Western plans for massive nuclear attacks, so too today is the synergy in the respective strengths of China and Russia key to protecting the sovereignty and security of the two nations from a very real and imminent threat. A few examples of the nature of this threat include growing investments in social engineering through social media – the results of have been seen in Hong Kong, Taiwan and Ukraine, a lowering threshold for nuclear weapons use by the United States – which it currently trains Western allies outside the NPT to deploy, and even reports from Russian and Korean sources of investments in biological warfare – reportedly being tested in Georgia, Eastern Europe and South Korea .

The partnership between Russia and China has become truly comprehensive, and is perhaps best exemplified by their military relations. From 2016 joint military exercises have involved the sharing of extremely sensitive information on missile and early warning systems – one of the most well kept defense secrets of any nuclear power which even NATO powers do not share with one another. Russia's defense sector has played a key role in the modernization of the Chinese People's Liberation Army, while Chinese investment has been essential to allowing Russia to continue research and development on next generation systems needed to retain parity with the United States. There is reportedly cooperation between the two in developing next generation weapons technologies for systems such as hypersonic cruise and anti aircraft missiles and new strategic bombers and fighter jets which both states plan to field by the mid-2020s. With the combined defense spending of both states a small fraction of that of the Western powers, which themselves cooperate closely in next generation defense projects, it is logical that the two should pool their resources and research and development efforts to most efficiently advance their own security.

Cooperation in political affairs has also been considerable, and the two parties have effectively presented a united front against the designs of the Western Bloc. In 2017 both issued strong warnings to the United States and its allies that they would not tolerate an invasion of North Korea – which was followed by the deployment of advanced air defense systems by both states near the Korean border with coverage of much of the peninsula's airspace. Following Pyongyang's testing of its first nuclear delivery system capable of reaching the United States , and renewed American threats against the East Asian country, China and Russia staged near simultaneous exercises near the peninsula using naval and marine units in a clear warning to the U.S. against military intervention. China's Navy has on several occasions deployed to the Mediterranean for joint drills with Russian forces – each time following a period of high tension with the Western Bloc over Syria.

In April 2018, a period of particularly high tensions between Russia and the Western Bloc over Western threats both to take military action against the Syrian government and to retaliate for an alleged but unproven Russian chemical weapons attack on British soil, the Chinese Defense Minister Wei Fenghe traveled to Russia and more explicitly stated that the Sino-Russian partnership was aimed at countering Western designs. Referring to the Sino-Russian defense partnership as "as stable as Mount Tai" he stated : "the Chinese side has come to show Americans the close ties between the Armed Forces of China and Russia, especially in this situation. We have come to support you." A week later China announced large-scale live fire naval drills in the Taiwan Strait – which according to several analysts were scheduled to coincide with a buildup of Western forces near Syria. Presenting a potential second front was key to deterring the Western powers from taking further action against Russia or its ally Syria. These are but a few examples Sino-Russian cooperation, which is set to grow only closer with time.

The Saker: The US remains the most formidable military power in Asia, but this military power is being eroded as a result of severe miscalculations of the US political leadership. How serious a crisis do you think the US is now facing in Asia and how do you assess the risks of a military confrontation between the US and the various Asian powers (China, the Philippines, the DPRK, etc,).

A.B. Abrams: Firstly I would dispute that the United States is the most formidable military power in the region, as while it does retain a massive arsenal there are several indicators that it lost this position to China during the 2010s. Looking at combat readiness levels, the average age of weapons in their inventories, morale both publicly and in the armed forces, and most importantly the correlation of their forces, China appears to have an advantage should war break out in the Asia-Pacific. It is important to remember that the for the Untied States and its European allies in particular wars aren't fought on a chessboard. Only a small fraction of their military might can be deployed to the Asia-Pacific within a month of a conflict breaking out, while over 95% of Chinese forces are already on the region and are trained and armed almost exclusively for war in the conditions of the Asia-Pacific. In real terms the balance of military power regionally is in China's favor, and although the U.S. has tried to counter this with a military 'Pivot to Asia' initiative from 2011 this has ultimately failed due to both the drag from defense commitments elsewhere and the unexpected and pace at which China has expanded and modernized its armed forces.

For the time being the risk of direct military confrontation remains low, and while there was a risk in 2017 of American and allied action against the DPRK Pyongyang has effectively taken this option off the table with the development of a viable and growing arsenal of thermonuclear weapons and associated delivery systems alongside the modernization of its conventional capabilities. While the U.S. may have attempted to call a Chinese and Russian bluff by launching a limited strike – which seriously risked spiraling into something much larger – it is for the benefit of all regional parties including South Korea that the DPRK now has the ability to deter the United States without relying on external support. This was a historically unprecedented event, and as military technology has evolved it has allowed a small power for the first time to deter a superpower without relying on allied intervention. Changes in military technology such as the proliferation of the nuclear tipped ICBM make a shooting war less likely, but also alters the nature of warfare to place greater emphasis on information war, economic war and other new fields which will increasingly decide the global balance of power. Where America's answer to the resistance of China and North Korea in the 1950s to douse them with napalm, today winning over their populations through soft power, promoting internal dissent, placing pressure on their living standards and ensuring continued Western dominance of key technologies has become the new means of fighting.

That being said, there is a major threat of conflict in the Asia-Pacific of a different nature. Several organizations including the United Nations and the defense ministries of Russia, Singapore and Indonesia among others have warned of the dangers posed by Islamic terrorism to stability in the region. Radical Islamism, as most recently attested to by Saudi Arabia's crown prince , played a key role in allowing the Western Bloc to cement its dominance over the Middle East and North Africa – undermining Russian and Soviet aligned governments including Algeria, Libya, Egypt and Syria – in most cases with direct Western support. CIA Deputy Director Graham Fuller in this respect referred to the agency's "policy of guiding the evolution of Islam and of helping them against our adversaries." Several officials, from the higher brass of the Russian, Syrian and Iranian militaries to the former President of Afghanistan and the President of Turkey , have all alleged Western support for radical terror groups including the Islamic State for the sake of destabilizing their adversaries. As the Asia-Pacific has increasingly slipped out of the Western sphere of influence, it is likely that this asset will increasingly be put into play. The consequences of the spread of jihadism from the Middle East have been relatively limited until now, but growing signs of danger can be seen in Xinjiang, Myanmar, the Philippines and Indonesia. It is this less direct means of waging war which arguably poses the greatest threat.

The Saker: Do you think that we will see the day when US forces will have to leave South Korean, Japan or Taiwan?

A.B. Abrams: Other than a limited contingent of Marines recently deployed to guard the American Institute , U.S. forces are not currently stationed in Taiwan. The massive force deployed there in the 1950s was scaled down and American nuclear weapons removed in 1974 in response to China's acceptance of an alliance with the United States against the Soviet Union. Taiwan's military situation is highly precarious and the disparity in its strength relative to the Chinese mainland grows considerably by the year. Even a large American military presence is unlikely to change this – and just 130km from the Chinese mainland they would be extremely vulnerable and could be quickly isolated from external support in the event of a cross straits war. We could, however, see a small American contingent deployed as a 'trigger wire' – which will effectively send a signal to Beijing that the territory is under American protection and that an attempt to recapture Taiwan will involve the United States. Given trends in public opinion in Taiwan, and the very considerable pro-Western sentiments among the younger generations in particular, it is likely that Taipei will look to a greater rather than a lesser Western military presence on its soil in future.

Japan and particularly South Korea see more nuanced public opinion towards the U.S., and negative perceptions of an American military presence may well grow in future – though for different reasons in each country. Elected officials alone, however, are insufficient to move the American presence – as best demonstrated by the short tenure of Prime Minister Hatoyama in Japan and the frustration of President Moon's efforts to restrict American deployments of THAAD missile systems in his first year. It would take a massive mobilization of public opinion – backed by business interests and perhaps the military – to force such a change. This remains possible however, particularly as both economies grow increasingly reliant on China for trade and as the U.S. is seen to have acted increasingly erratically in response to challenges from Beijing and Pyongyang which has undermined its credibility. As to a voluntary withdrawal by the United States, this remains extremely unlikely. President Donald Trump ran as one of the most non-interventionist candidates in recent history, but even under him and with considerable public support prospects for a significant reduction in the American presence, much less a complete withdrawal, have remained slim.

The Saker: Some circles in Russia are trying very hard to frighten the Russian public opinion against China alleging things like "China want to loot (or even conquer!) Siberia", "China will built up its military and attack Russia" or "China with its huge economy will simply absorb small Russia". In your opinion are any of these fears founded and, if yes, which ones and why?

A.B. Abrams: A growth in Sinophobic sentiment in Russia only serves to weaken the nation and empower its adversaries by potentially threatening its relations with its most critical strategic partner. The same is applicable vice-versa regarding Russophobia in China. Given the somewhat Europhilic nature of the Russian state in a number of periods, including in the 1990s, and the considerable European soft influences in modern Russia, there are grounds for building up of such sentiment. Indeed Radio Free Europe, a U.S. government funded nonprofit broadcasting corporation with the stated purpose of "advancing the goals of U.S. foreign policy," notably published sinophobic content aimed at depicting the Russian people as victims of Chinese business interests to coincide with the Putin-XI summit in June 2019. However, an understanding of the modern Chinese state and its interests indicates that it does not pose a threat to Russia – and to the contrary is vital to Russia's national security interests. While Russia historically has cultural ties to the Western nations, the West has shown Russian considerable hostility throughout its recent history – as perhaps is most evident in the 1990s when Russia briefly submitted itself and sought to become part of the Western led order with terrible consequences. China by contrast has historically conducted statecraft based on the concept of a civilization state – under which its strength is not measured by the weakness and subjugation of others but by its internal achievements. A powerful and independent Russia capable of protecting a genuine rules based world order and holding lawless actors in check is strongly in the Chinese interest. It is clear that in Russia such an understanding exists on a state level, although there is no doubt that there will be efforts by external parties to turn public opinion against China to the detriment of the interests of both states.

The idea that China would seek to economically subjugate Russia, much less invade it, is ludicrous. It was from Europe were the major invasions of Russian territory came – vast European coalitions led by France and Germany respectively with a third American led attack planned and prepared for but stalled by the Soviet acquisition of a nuclear deterrent. More recently from the West came sanctions, the austerity program of the 1990s, the militarization of Eastern Europe, and the demonization of the Russian nation – all intended to subjugate and if possible shatter it. Even at the height of its power, China did not colonize the Koreans, Vietnamese or Japanese nor did it seek to conquer Central Asia. Assuming China will have the same goals and interests as a Western state would if they were in a similar position of strength is to ignore the lessons of history, and the nature of the Chinese national character and national interest.

The Saker: The Russian military is currently vastly more capable (even if numerically much smaller) than the Chinese. Does anybody in China see a military threat from Russia?

A.B. Abrams: There may be marginalized extreme nationalists in China who see a national security from almost everybody, but in mainstream discourse there are no such perceptions. To the contrary, Russia's immense contribution to Chinese security is widely recognized – not only in terms of technological transfers but also in terms of the value of the joint front the two powers have formed. Russia not only lacks a history of annexing East Asian countries or projecting force against them, but it is also heavily reliant on China in particular both to keep its defense sector active and to undermine Western attempts to isolate it. Russian aggression against China is unthinkable for Moscow – even if China did not possess its current military strength and nuclear deterrence capabilities. This is something widely understood in China and elsewhere.

I would dispute that Russia's military is vastly more capable than China's own, as other than nuclear weapons there is a similar level of capabilities in most sectors in both countries. While Russia has a lead in many key technologies such as hypersonic missiles, air defenses and submarines to name a few prominent examples, China has been able to purchase and integrate many of these into its own armed forces alongside the products of its own defense sector. Russia's most prominent fighter jet for example, the Flanker (in all derivatives from Su-27 to J-11D), is in fact fielded in larger numbers by China than by Russia itself – and those in Chinese service have access to both indigenous as well as Russian munitions and subsystems. Furthermore, there are some less critical but still significant sectors where China does appear to retain a lead – for example it deployed combat jets equipped with a new generation of active electronically scanned array radars and air to air missiles from 2017 (J-20 and in 2018 J-10C ) – while Russia has only done so this in July 2019 with the induction of the MiG-35. Whether this is due to a Chinese technological advantage, or to a greater availability of funds to deploy its new technologies faster, remains uncertain. Russia's ability to provide China with its most vital technologies, and China's willingness to rely so heavily on Russian technology to comprise so much of its inventory, demonstrates the level of trust between the two countries

The Saker: Do you think that China could become a military threat to other countries in the region (especially Taiwan, India, Vietnam, the Philippines, etc.)?

A.B. Abrams: I would direct you to a quote by Malaysian Prime Minister Mahathir Bin Mohamed from March this year. He stated: "we always say, we have had China as a neighbor for 2,000 years, we were never conquered by them. But the Europeans came in 1509, in two years, they conquered Malaysia." This coming from a nationalist leader considered one of the most sinophobic in Southeast Asia, whose country has an ongoing territorial dispute with China in the South China Sea, bears testament to the nature of claims of a Chinese threat. It is critical not to make the mistake of imposing Western norms when trying to understand Chinese statecraft. Unlike the European states, China is not and has never been dependent on conquering others to enrich itself – but rather was a civilization state which measured its wealth by what it could its own people could produce. A harmonious relationship with India, Vietnam, the Philippines and others in which all states' sovereign and territorial integrity is respected is in the Chinese interest.

A second aspect which must be considered, and which bears testament to China's intentions, is the orientation of the country's armed forces. While the militaries of the United States and European powers such as Britain, the Netherlands, Belgium and France among others are heavily skewed to prioritize power projection overseas, China's military has made disproportionately small investments in power projection and is overwhelmingly tailored to territorial defense. While the United States has over 300 tanker aircraft deigned to refuel its combat jets midair and attack faraway lands, China has just three purpose-built tankers – less than Malaysia, Chile or Pakistan. The ratio of logistical to combat units further indicates that China's armed forces, in stark contrast to the Western powers, are heavily oriented towards defense and fighting near their borders.

This all being said, China does pose an imminent threat to the government in Taipei – although I would disagree with your categorization of Taiwan as a country. Officially the Republic of China (ROC- as opposed to the Beijing based People's Republic of China), Taipei has not declared itself a separate country but rather the rightful government of the entire Chinese nation. Taipei remains technically at war with the mainland, a conflict would have ended in 1950 if the U.S. had not placed the ROC under its protection. The fast growing strength of the mainland has shifted the balance of power dramatically should the conflict again break out into open hostilities. China has only to gain from playing the long game with Taiwan however – providing scholarships and jobs for its people to live on the mainland and thus undermining the demonization of the country and hostility towards a peaceful reunification. Taiwan's economic reliance on the mainland has also grown considerably, and these softer methods of bridging the gaps between the ROC and the mainland are key to facilitating unification. Meanwhile the military balance in the Taiwan Strait only grows more favorable for Beijing by the year – meaning there is no urgency to take military action. While China will insist on unification, it will seek to avoid doing so violently unless provoked.

The Saker: In conclusion: where in Asia do you see the next major conflict take place and why?

A.B. Abrams: The conflict in the Asia-Pacific is ongoing, but the nature of conflict has changed. We see an ongoing and so far highly successful de-radicalization effort in Xinjiang – which was taken in direct response to Western attempts to turn the province into 'China's Syria or China's Libya,' in the words of Chinese state media, using similar means. We see a harsh Western response to the Made in China 2025 initiative under which the country has sought to compete in key technological fields formerly monopolized by the Western Bloc and Japan – and the result of this will have a considerable impact on the balance of economic power in the coming years. We see direct economic warfare and technological competition between China and the United States &nda