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Gangster Capitalism: Financial oligarchy and the Globalization of Organized Crime

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"The hidden hand of the market will never work without a hidden fist" 

Thomas Friedman 

If you think that Yeltsin privatization (see  Harvard Mafia, Andrei Shleifer and the economic rape of Russia) and rise of organized crime in Russia are two distinct phenomenon, think again. Neoliberalism which declare profit as single and only moral value is in reality deeply interconnected with organized crime both in methods and personalities.  This is not very noticed in the USA, but quite so in, say, Ukraine.

It's not accidental that Forbes magazine recently placed two Mexicans, Carlos Slim and Joaquín Guzmán, high on their list of the most powerful people in the world. Carlos Slim is the world’s third-richest man and CEO of a telecommunications company and Joaquín Guzmán is the leader of the Sinaloa drug cartel.

US Big Banks Are A Culture of Crime! TheTradingReport

Organized crime. This phrase is now a precise synonym for big-banking in the United States. These Big Banks commit big crimes; they commit small crimes. They cheat their own clients; they swindle outsiders. They break virtually every financial law on the books. What do all these crimes have in common? The Big Banks commit all these crimes again and again and again – with utter impunity.

These fraud factories commit their serial mega-crimes, year after year, because the Big Banks know that they will never, ever be punished. On rare occasions, their crimes have been so egregious that U.S. ‘justice’ officials could no longer pretend to be oblivious to them. In such cases, there was a token prosecution, there was a settlement where the law-breaking banks didn’t even have to acknowledge their own criminality, and there was a microscopic fine – which didn’t even force the felonious financial institutions to disgorge all of their profits from these crimes.

Criminal sanctions, by definition, are supposed to deter criminal conduct. The token prosecutions against U.S. Big Banks didn’t deter Big Bank crime, they encouraged it. But even these wrist-slaps were becoming embarrassing for this crime syndicate, so they dealt with this problem. The Big Bank crime syndicate told its lackeys in the U.S. ‘justice’ department that they were not allowed to prosecute one of its tentacles, ever again.

The lackeys, as always, obeyed their Masters, and issued a new proclamation. The U.S. ‘Justice’ Department would never prosecute a U.S. Big Bank ever again – no matter what crimes it committed, no matter how large the crimes, no matter how many times the same Big Banks committed the same crimes. Complete, legal immunity; totally above the law. A literal culture of crime.

What happens when you create a culture of crime in (big) banking? Not only the banks break laws – with impunity – their bank employees do so as well. Case in point: Warren Buffett’s favorite Big Bank – Wells Fargo. Wells Fargo employees came up with a good idea for boosting their salaries: stealing money directly out of the accounts of the bank’s clients.

Consider how large this crime became, in just one of these tentacles of organized crime.

L.A City Attorney Mike Feuer announced a $185 million settlement reached with Wells Fargo, after thousands of bank employeessiphoned funds from their customers to open phony checking and savings accounts raking in millions in fraudulent fees.[emphasis mine]

Thousands of bank employees stealing millions of dollars from bank customers, in tiny, little increments, again and again and again. But the story gets much worse. Why was a lowly city attorney involved with the prosecution of this organized crime?

So where is the FBI? Where is the Department of Justice? How about California Attorney General Kamala Harris? Too busy campaigning for the Senate to notice? How about L.A. District Attorney Jackie Larry?

Only City Attorney Mike Feuer took action, and he only has the authority to prosecute misdemeanors…

There are only two ways in which the non-action of the U.S. pseudo-justice system can be explained:

  1. All of the layers of “justice” above the City Attorney, are completely bought-off, and refuse to prosecute one of the corporate fronts of their (real) Masters.
  2.  All of the layers of “justice” above the City Attorney considered this systemic crime by Wells Fargo’s employees to be nothing more than a misdemeanour.

Take your pick. The U.S. pseudo-justice system is used to seeing so many multi-billion dollar mega-crimes being committed by these fraud factories that the systemic crime at Wells Fargo (which was ‘only’ in the $millions) didn’t even attract their attention. Or, the entire U.S. pseudo-justice system is completely bought-off and corrupt – and they refuse to prosecute Big Bank organized crime.

A culture of crime.

It gets still worse. Thousands of Wells Fargo employees stole millions of dollars, from countless clients. They were caught. But not even one banker was sent to jail. In a real justice system, systemic crime of this nature would/could only be prosecuted in one of three ways. Either every Wells Fargo criminal would be prosecuted to the full extent of the law (given the egregious nature of the crime), or Wells Fargo management would be prosecuted – because they would have/should have known about this crime-wave. Or else both.

Bankers stealing money, directly and brazenly, right out of customer accounts, but no one goes to jail? A culture of crime.

Understand that endemic, cultural changes of this nature don’t originate at the bottom of the corporate ladder. They originate at the top. In the case of the Wall Street crime syndicate; we already know that their management personnel are criminals, because they haveadmitted to being criminals.

Many Wall Street executives says [sic] wrongdoing is necessary: survey

If the ancient Greek philosopher Diogenes were to go out with his lantern in search of an honest man today, a survey of Wall Street executives on workplace conduct suggests he might have to look elsewhere.

A quarter of Wall Street executives see wrongdoing as a key to success, according to a survey by whistleblower law firm Labaton Sucharow released on Tuesday.

In a survey of 500 senior executives in the United States and the UK [New York and London], 26 percent of respondents said they had observed or had firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful… [emphasis mine]

One-quarter of Big Bank management admitted that they “need” to commit crimes. A culture of crime. More needs to be said about the rampant, disgusting criminality among upper management in the Big Banks of the U.S. (and UK).

A known whistleblower was conducting a public survey, asking known criminals how many of them were engaging in criminal behavior. What percentage of respondents would lie when answering such a survey? Three-quarters sounds about right. One-quarter of Wall Street executives admitted that committing crimes was a way of life. The other three-quarters lied about their criminal acts.

Monkey see; monkey do. The lower level foot soldiers see their Bosses breaking laws, with impunity, on a daily basis. Their reaction, at Wells Fargo? “Me too.”

Most if not all of the Wall Street fraud factories conduct detailed “personality testing” on their bank personnel. Are they looking to weed-out those with criminal (if not psychopathic) inclinations? Of course not. They conduct this personality testing to find which employees have no reservations about engaging in criminal conduct – so they can be fast-tracked for promotion.

There is no other way in which the systemic criminality of senior banking personnel can be reconciled with the detailed personality-testing in which they participated, in order to reach that level of management. The Wall Street fraud factories look for the most amoral criminals which they can find. And with the exorbitant, ludicrous “compensation” they award to these criminals for their systemic crimes, they end up with (literally) the best criminals that money can buy.

A culture of crime.

As a final note; the U.S. system of pretend-justice already has a powerful weapon in its arsenal to fight organized crime: the “RICO” act. This anti-racketeering statute was created for one, precise purpose: to not merely prosecute/punish organized crime, but to literallydismantle the crime infrastructure which supports the organized crime.

Not only does the statute confer strong (almost limitless) powers in gathering evidence of organized crime, it also permits mass seizures of assets – anything/everything connected to the organized crime of the entity(ies) in question. In the case of the Big Bank crime syndicate, where all of its operations are directly/indirectly tied into criminal operations of one form or another, if RICO was turned loose on these fraud factories, by the time the dust had settled there would be nothing left.

Oh yes. If the U.S. ‘Justice’ Department ever went “RICO” on U.S. Big Banks, lots and lots and lots of bankers would go to prison, for a very, long time.

Gangster Capitalism: The United States and the Globalization of Organized Crime

The first researcher who explored this uncanny relationship between that two and strong links between the neoliberal system of governance and organized crime was Michael Woodiwiss with his influential book Gangster Capitalism: The United States and the Globalization of Organized Crime (Paperback):

Everyone knows what organized crime is. Each year dozens of feature films, hundreds of books, and thousands of news stories explain to an eager public that organized crime is what gangsters do. Closely knit, ethnically distinct, and ruthlessly efficient, these mafias control the drugs trade, people trafficking and other serious crimes. If only states would take the threat seriously and recognize the global nature of modern organized crime, the FBI's success against the Italian mafia could be replicated throughout the world. The wicked trade in addictive drugs could be brought to a halt.

The trouble is, as Woodiwiss demonstrates in shocking and surprising detail, what everyone knows about organized crime is pretty much completely wrong. In reality the most important figures in organized crime are employees of multinational companies, politicians and bureaucrats. Gangsters are certainly a problem, but much of their strength comes from attempts to prohibit the market for certain drugs.

Even here they are minor players when compared with the intelligence and law enforcement agencies that selectively enforce prohibition and profit from it. Woodiwiss shows how respectable businessmen and revered statesmen have seized these opportunities in an orgy of fraud and illegal violence...

Customer Reviews

A very timely book, November 16, 2008 Joseph Oppenheim (San Diego, CA USA) - See all my reviews

What makes "Gangster Capitalism" so worthwhile is that it helps in understanding what has led us to the 2007-8 financial meltdown. As the book shows, like during the 1920's, deregulation led the way for powerful companies to allow the very wealthy to get wealthier at the expense of average people by using poor working conditions, low wages, etc, plus at the same time supporting supposedly moral movements (against gambling, alcohol, drugs, etc) which mainly served the purpose of making these trades more profitable to crooks and therefore created rampant gangsterism there. The result was such a society wracked with gangsterism at all levels, but because most people felt they were prospering, few complained.

But, then it all collapsed with the 1929 crash and resulting Depression, which led the way for FDR and the New Deal programs which increased regulation of corporations, repeal of Prohibition, etc. Though the Depression lingered until WWII, the New Deal was successful in restructuring our laws and public infrastructure to create a better footing for the prosperity which would follow.

The book effectively traces how much of this regulation was reduced piece by piece, beginning in earnest with Nixon, using Cold War fears to tilt the nation toward more corporate power and away from reform, support of right-wing dictators around the world, re-energizing a 'moral crusade' especially by beginning the War on Drugs, thereby making the illegal drug trade super profitable, etc.

The nation had shifted Right and even Democratic presidents like Carter who was instrumental in deregulating industry and Clinton who signed into law the repeal of Glass--Steagle weren't able to stop the shift. Then, the 'Gangster Capitalism" went on steroids with G. W. Bush. By 2003, corporate taxes only amounted to 7% of revenues, while payroll taxes amounted to 40%.

Of note, the book makes clear it is opportunity which leads to much crime, so the approach of massive deregulation of corporations, plus focusing on arrests and imprisonment for victimless crimes ends up with the wrong results, more entrenched crime, even allowing corporations to capitalize on a prison industry.

The book is also good at highlighting how corporations and outright gangsters were able to corrupt legal drugs (price-fixing), tobacco, asbestos, body parts, autos (Pintos), etc. Some other things in the book, of note: Hamid Karzai included drug traffickers in his Afghan administration.

And, our support of Suharto (Indonesia), Mobuto (the Congo), and Marcos (the Philippines) allowed 'looting' of these countries.

A corrupt financial infrastructure included the BCCI bank and offshore banking to evade taxes also developed. Plus, laundering money from illegal arms sales, drugs, and so many other illegal activities passed through our financial system.

The book is definitely tilted toward a liberal way of looking at things, therefore it doesn't go into the good things about capitalism, but there are disturbing patterns which are important to understand, and this book does that very well.

Wasted opportunity, September 6, 2006

By James R. Maclean (Seattle, WA United States) - See all my reviews
(REAL NAME)
Despite the fact that I was predisposed to agree with many of the author's views, this book was a huge disappointment. First, the basic premises:
  1. American business enterprise is singularly corrupt;
  2. Most of the crime that Americans suffer from is corporate crime;
  3. American methods of fighting crime focus on lurid fantasies of underworld conspiracy;
  4. The USA exports criminality through its foreign & trade policies.

Each of these premises could have been, and in other venues have been, well-argued. The first three suffer from a lack of generally accepted, objective measures, but experts on criminology have overcome worse obstacles. What we get instead is an unfocused, rambling listing of claims (plausible, but very poorly documented) about the criminal underworld, anecdotes about corporate crime, and extreme statements. No doubt "legitimate" business enterprise does rip off more money from customers each year than do gangsters or mafiosi; but the latter also account for a tiny fraction of the total US labor force. And comparing deaths from industrial accidents to mob hits is just over the top.

Woodiwiss says that the book "had its inception during a seminar series on transnational organized crime run by Adam Edwards and Peter Gill... Adam and Peter put together several of the best academic researchers from Europe and North America...." Yet the book is exasperatingly badly substantiated. I noticed almost no original research. Woodiwiss's footnotes, which--like cops--are never around when you need them (viz., when he is actually saying something that requires documentation), are almost exclusively from articles in the *Guardian* or from other sensational exposes. Radical literature has its place, of course, but saying, "US capitalism is just like organized crime... see, it says so in 'The New Left Review'" is just a harangue, not evidence.

The back cover declaims: "..[T]he position of large multinational corporations...actually provide the most enticing opportunities for illegal profit...Gangster Capitalism shows how respectable businessmen and revered statesmen have seized these opportunities in an orgy of fraud and illegal violence that would leave the most hardened mafiosi speechless."

In fact, it's a disappointing pile of clippings. With the exception of his claims--again, plausible but unsubstantiated--you are not going to find any surprises here.

As I mentioned, he attacks conventional wisdom regarding the mafia and J. Edgar Hoover (who comes off surprisingly well); unfortunately, Woodiwiss offers almost no support for those contentions that are likely to be controversial. For example, on p.78 he mentions President [Nixon]'s Advisory Council on Executive Organization, "Organized Crime Strike Force Report" [1969], which included a vaguely worded remark that the reliance on legal sanctions to fight drug abuse was actually causing organized crime to flourish." This is footnoted. Then he says that Nixon was so horrified by this that he ruthlessly suppressed the report. This is not footnoted. The next pargagraph (p.49) includes a quote from a law enforcement officer claiming that gambling arrests were made just to pad the arrest numbers; this is footnoted. The next paragraph declares that gampling is no more corrupt than the rest of the economy. A surprising observation, it is predictibly not footnoted.

The result: lots of footnotes documenting that water is a bit on the damp side, but nothing to support the controversial stuff. Only a small part is devoted to crime; the rest is a paste-up job from two dozen radical critiques of the USA. Anything from the 1971 ditching of the gold exchange standard to the various covert activities of the CIA are brought up, with no more compelling a connection to Woodiwiss' original point than being bad things that Americans did.

< are so insipid (it calls for "fair trade" with no further specification of how that would be any different... capital punishment for corporations--evidently Mr. Woodiwiss has never heard of 'money laundering,' in which a vehicle corporation commits suicide), that it is pointless to spend any time on them. Woodiwiss needs to actually learn something about economics; ironically enough, for someone who claims business is closely tied to crime, he knows almost nothing about it. He needs to know, and say what he knows, about law enforcement and business practices abroad, so he can make a comparison. And finally, he needs to actually learn how to write.


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[Sep 12, 2018] State AGs to Step Up Enforcement Against Tech Companies

Sep 12, 2018 | www.nakedcapitalism.com

Such separate priorities may also extend to areas in which the federal government regulates extensively, such as securities law (or at least did in the not-so-distant past), as I discussed in this post, Mary Jo White Leaves Behind a Weakened SEC for Trump to Weaken Further :

During the administration of President George W. Bush, state attorneys general used state authority to prosecute securities and financial transgressions. Notably, former New York state Attorney General Eliot Spitzer relied on authority provided by the state's 1910 Martin Act, which predates the federal securities law, to take legal action actions against insurance firms for brokerage practices, hedge funds for improper trading practices in mutual fund shares, and investment banks for conflicts of interest that distorted the investment research they provided, to name some of the most significant initiatives. Spitzer's successors as attorney general, current New York Governor Andrew Cuomo and current Attorney General Eric Schneiderman, have not had the impact that Spitzer had when he was lauded as the Sheriff of Wall Street.

Another New York regulator, Benjamin Lawsky, superintendent of New York's Department of Financial Services used the threat of denying a NY state banking charter to force tougher terms on settlements in which the Eric Holder/Loretta Lynch DoJ and other federal regulators had rolled over (see this post by Yves for a summary: Wall Street's Nemesis, Benjamin Lawsky, to Resign in June .).Other states, such as California, have their own expansive statutes– though now-US Senator Kamala Harris demonstrated when she served as California's AG that she more interested in virtue-signalling than taking scalps.

Crusading state AGs are not just Democrats. As I wrote in New EPA Lawsuit Policy Advances Trump's Deregulatory Agenda , Scott Pruitt– who recently stepped down as EPA administrator:

has been a longstanding bugbear of environmentalists. In his previous role as attorney general for the state of Oklahoma– a major producer of oil and natural gas– he either filed or joined lawsuits that sought to stymie the modest pro-regulatory environmental and climate change agenda the EPA previously espoused.

Like-minded Republicans AGs often joined him in these efforts.

So, What's On the Agenda for These AGs?

The most immediate threat to the tech industry might arise in the area of antitrust enforcement– which, shall we say, has not been a major priority for recent administrations, although the European Union has investigated and fined Google over competition concerns. Yet as recently as the Clinton administration, Microsoft was a target of an major antitrust action instigated by multiple state AGs in conjunction with the DoJ

Over to the WSJ again:

The [Sessions meeting ] announcement -- released amid last week's congressional hearings into the practices of Facebook and Twitter -- shed little light on who was raising the concerns or what remedies might be under consideration. But recent comments by several of the state attorneys general suggest they are actively exploring an antitrust investigation and hope to enlist Washington.

"I think the companies are too big, and they need to be broken up," Republican Louisiana Attorney General Jeff Landry said Thursday in a radio interview.

There is some evidence that party politics are driving this potential enforcement initiative:

Republicans' allegations that the tech companies suppress conservative voices has bubbled up for months in conservative media and was amplified by Mr. Trump late last month . Democrats have said that is the issue -- more than antitrust policy -- behind the coming Justice Department meeting, with Republicans hoping to stir their conservative base ahead of November elections

All the attorneys general who are expected to attend this month's meeting in Washington are Republicans, with Democratic officials saying they have yet to be invited.

Although it's too soon to say where these preliminary discussions between the DoJ and the the state AGs may lead, I want to draw attention to another development– the weakening of the hold of corporate Democrats on the direction of the party. David Sirota published an interesting piece in Monday's Guardian, Yes, let's wipe out Trump. But take neoliberal Democrats with him, too .

Sirota's piece wasn't especially concerned about Big Tech per se, and focused on a percolating progressive policy agenda. He mentions regulation, but only as it affects financial firms and pharmaceutical companies and where so far, corporate Democrats have successfully insulated their paymasters from any significant increase in legal liability.

But if progressives start to wield greater influence on the Democratic side– and Republican AGs follow through with a tougher approach to enforcement– the future might shape up to be a less comfortable operating environment for US internet companies. Or at least we might hope. /n

TS , September 12, 2018 at 8:31 am

I can understand antitrust and data-privacy violations but with regard to "stifling the free exchange of ideas" on their platforms, what legal statutes are being violated even if these companies were found to be supressing conservative speech?

Mark , September 12, 2018 at 1:46 pm

The OLG Munich recently decided that Facebook violated the right to free speech of a politician by deleting her post. Facebook gave their community rules as a reason for the deletion. The court ruled that Facebook could not rely on their rights a privat entity to do as they please in their own place (Hausrecht in German) but rather had to uphold the right to free spreech granted by the German constitution. This is a new interpretation of the law by a significant court and possibly transfers some of the burden ususally only placed on the state (uphold free speech) unto a privat company. The reason given is that Facebook is a controlling, monopolistic entity in the realm of social interaction and has therefore more responsibilties. The OLG Munich is the highest court in its court-district, Southern Bavaria, only below the federal court (BGH) and the ruling sets a binding precedent in its district and serves as an interesting opinion for the rest of Germany. Mind you precedent is of a lot less important in Germany than in the case-law US system and there are many differing rulings out there.

I suppose the arguments for supressing conservative speech or something like that might go a similar route in the US.

source: https://www.techdirt.com/articles/20180907/00455240595/german-court-tells-facebook-it-cant-delete-comments-even-though-german-law-says-it-must-delete-comments.shtml

PS: Please excuse the rambling source it is the only one in English I could find; also take my reasoning regarding the court ruling with a pinch of salt since I am not an attorney. At least the apparent confusion between forced deletion on one hand and forced non-deletion on the other hand mentioned in the source is easily explained. Free speech has its limits and violating those is in some cases a criminal offence, e.g. criminal insults, incitement to violance against people, etc.. A recent law in Germany requires sites like Facebook or Twitter to take obvious cases of such posts down, instead of waiting for the police or prosecution to act. This is worthy of a discussion in itself but it still leaves room between what Facebook arbitrarily deems acceptable based in its guidelines and what is acceptable under free speech in Germany, and here the court made their ruling.

[Sep 03, 2018] Neo-liberalism Expressed as Simple Rules by Lambert Strether

Mar 17, 2014 | www.nakedcapitalism.com

What is neoliberalism? Neoliberalism (a.k.a. The Washington Consensus ) is the dominant ideology of the political class in Washington D.C., shared by both legacy parties. In fact, it's not clear there is another ideology, which is why we get seemingly weird policymaking processes like RomneyCare morphing into ObamaCare, even as proponents of each version of the same plan hate each other, "narcissism of small differences"-style. Of course, in neo-liberalism's house are many mansions, many factions, and many funding sources, so it's natural, or not , that an immense quantity of obfuscation and expert opinion has accumulated over time , making for many fine distinctions between various shades of neo-liberalism.

In this brief post, I hope to clear the ground by proposing two simple rules to which neo-liberalism can be reduced. They are:

Of course, these rules can't be applied, willy-nilly, inartfully, in just any context; Rule #1 -- and here we owe an immense debt of gratitude to the work of Outis Philalithopoulos on academic choice theory -- doesn't apply to in (let's label it) Context #1: The world of the neo-liberal practitioners themselves ; the academic guilds, media outlets[1], and think tanks to which they adhere, Flexian style , are distinctly not market-driven ; just look at Thomas Friedman . It follows that Rule #2 does not apply to neo-liberal practitioners either, because of their social position just described in Context #1: "wingnut welfare" and its equivalent in the "progressive" nomenklatura ; they will have -- to strike a blow at random -- corporate health insurance. In addition, we have Context #2: The world of the 0.01%, to whom no rules apply by definition. Summarizing, the rules do not apply in the following two contexts:

Both have impunity[2]. These asymmetries will become more interesting shortly.

So (reviewing), to Rule #1: " Because markets " uses that stupid "because" meme :

Let's start with the dull stuff, because pragmatism. Linguists are calling the "prepositional-because." Or the "because-noun." [For example:] But Iowa still wants to sell eggs to California, because money. It's a usage, in other words, that is exceptionally bloggy and aggressively casual and implicitly ironic. And also highly adaptable. it also conveys a certain universality. When I say, for example, "The talks broke down because politics," I'm not just describing a circumstance. I'm also describing a category. I'm making grand and yet ironized claims, announcing a situation and commenting on that situation at the same time. I'm offering an explanation and rolling my eyes -- and I'm able to do it with one little word. Because variety. Because Internet. Because language.

Because neo-liberalism. Because I like the idea, a lot, of catching the Mount Pelerin Society, Pinochet, Diane Rehm, the Friedmans, Joe Biden, Rush Limbaugh, and the people who drafted the Democratic platform in one big net, and then deep-sixing the entire squirming and gesticulating political class with language that's "exceptionally bloggy and aggressively casual and implicitly ironic."

And this tactic really is fair. Trap a neo-liberal in conversation next to a whiteboard, or hand them a napkin, and you can probably coax them to "educate" you by drawing the famous "Because Markets" diagram, which looks like this:

Figure 1: "Because Markets"

And when your targeted neo-liberal is done sketching, they will express the idea, with varying degrees of quasi-religious fervor, that the price set by the intersection of the downward-sloping demand curve and the upward-sloping supply curve is the right price .

Except the supply and demand curve ain't necessarily so. The other day, I saw an elegant hi-so lady eating a Krispy Kreme in Bangkok's Siam Paragon . With a fork! That donut cost her 27 baht -- 84¢, 5¢ more than the US , in a city with half the cost-of-living of New York ! So, what's going on? To her, Krispy Kreme donuts are a luxury good. How does she know that? Exactly because they have a high price! Therefore -- Thorstein Veblen would be proud -- those donuts have an upward sloping demand curve ! (Yves, who is actually qualified to talk about this stuff, goes over these issues in more detail than I can, in ECONned .) So, empirically, seeking truth from facts, as they say, Figure 1 is by no means universal. And that's before we get to the idea that "Because markets" isn't appropriate for vast swaths of human endeavor; Common Pool Resources, for example, are not best managed as a form of private property .

But by "right," your neo-liberal interlocutor will not mean right mechanically or arithmetically, but right morally ; that is, the best of all possible worlds will be created when there are no pesky artificial factors interfering with the frictionless operation of the sacred curves. Note, however, that by the asymmetry of Context #1, Figure 1 does not apply to the neo-liberal practitioner themselves, nor, by the asymmetry of Context #2, to the class of people who own the markets in which the prices are set. So, if unions raise the price of human rental, that's not just an ordinary bargaining process, it's wrong, even evil: It's a defilement of the sacred curves. But if a squillionaire uses their power to bust that same union, that's not merely no problem, it's not even part of the problem (by Context #2). Hence, we have the pleasant and realistic outcome that the price of a Walmart worker's time isn't enough to live on , the price of the (no doubt credentialled) neo-liberal practititioner's time is somewhere in, er, the "middle," and the price of a squillionaire's time is so high they buy grotesquely expensive homes and forget they own them . Because markets.

So, to Rule #2 (reviewing): " Go die!
" Note that, unlike Rule #1, Rule #2 is cast in the imperative. However, just as in Rule #1, Contexts #1 and #2 apply. The imperative is not for everyone! That is, the 0.01% are not sent the message, along every possible channel, to "Go die!" No no. They are told -- at least by themselves -- to "Go to Mars!" (Which I wish they would do, and leave us alone.) Take ObamaCare. Please. Wendell Potter, who used to do PR for the health insurance industry, explains how "Because Markets" works in that context. (I mean, they call it a "Marketplace" for a reason, right?)

Lawmakers who wrote the Affordable Care Act fell for [assuming good faith] the health insurance industry's insistence that Americans want "choice and competition." [Rule #1, which lawmakers share with insurers.] Having worked in that industry for two decades, I know the real reason insurers and their allies kept reciting the "choice and competition" mantra was to scare lawmakers away from even daring to give serious thought to a single-payer health care system [which is a Rule #1 violation, at least in for citizens seeking treatment].

And I also know that insurers benefit from the marketplace confusion that "choice and competition" can create. I can assure you that some insurers are counting on you becoming overwhelmed by all the choices and picking a plan that might appear at first glance to be a bargain. But beware: if you're not careful and pick a plan without really kicking the tires, you very possibly will be buying something that could wind up costing you much more than you ever imagined if you get sick or injured.

That happened to my friend Donna Smith, who as executive director of the Health Care for All Colorado Foundation, knows more about health insurance than most of us. She spent quite a bit of time last fall on the Colorado exchange trying to figure out which plan would offer the best value for her and her husband. If she had to do it over again, she would have taken the additional step of calling the insurance companies directly after reviewing the plans they were offering on the exchange, just to be certain of what her out-of-pocket obligations would be if she had to be hospitalized during the year.

A cancer survivor, Donna knew there would be a chance she might get sick again and need expensive care [Rule #2]. It never occurred to her, though, that picking a gold or platinum level plan with a higher premium would likely have been better deal than the silver Kaiser Permanente plan she opted for and that seemed to be more affordable.

To make shopping for coverage even more challenging, Kaiser and most other insurers offer several silver plans on the Colorado exchange, so Donna had to spend time trying to figure out which silver plan would be the best deal.

Donna told me the she took the time to compare the monthly premiums, co-pays and annual deductibles of each of the silver plans before making her decision. "I felt that the one I chose offered the most coverage I could afford with my premium buying dollar," she said.

Sure enough, within days after the plan went into effect on January 1, Donna got sick and was hospitalized for a week.

To her shock, she later found out some limitations of her coverage that made her overall financial responsibility much higher.

You can see that Smith really was making a life-and-death choice when she purchased insurance in the "Marketplace" designed by insurance companies. And if you multiply Smith's story by millions nationwide, you'll see that those are not good at manipulating the market to their ends, or don't have the hours to spend that Donna does, are more likely to have lethal outcomes from their choices -- choices they are mandated to make only so that parasitical health insurance rent extractors can make a buck -- than those who have better skills, or have the hours to spend, or who have their insurance purchased for them by trusted agents. Statistically, and actuaries no doubt can calculate this sort of thing, a percentage of the insured will not make the choices that will get them the care they need, and, again statistically, a certain percentage of those will lose their lives. Because markets.

All of brings me to a strong story by Annie Lowrey in the Times , which was the impetus behind this post. In fact, it ticked me off so much I can hardly think straight:

Income Gap, Meet the Longevity Gap

Fairfax County, Va., and McDowell County, W.Va., are separated by 350 miles, about a half-day's drive. Traveling west from Fairfax County, the gated communities and bland architecture of military contractors give way to exurbs, then to farmland and eventually to McDowell's coal mines and the forested slopes of the Appalachians. Perhaps the greatest distance between the two counties is this: Fairfax is a place of the haves [Contexts #1 and #2], and McDowell of the have-nots. Just outside of Washington, fat government contracts [that is, through policy choice] and a growing technology sector buoy the median [!!] household income in Fairfax County up to $107,000, one of the highest in the nation. McDowell, with the decline of coal, has little in the way of industry. Unemployment is high. Drug abuse is rampant. Median household income is about one-fifth that of Fairfax.

One of the starkest consequences of that divide is seen in the life expectancies of the people there. Residents of Fairfax County are among the longest-lived in the country: Men have an average life expectancy of 82 years and women, 85, about the same as in Sweden. In McDowell, the averages are 64 and 73, about the same as in Iraq .

Since the 1980s, "socioeconomic status [class] has become an even more important indicator of life expectancy." That was the finding of a 2008 report by the Congressional Budget Office. But dollars in a bank account have never added a day to anyone's life, researchers stress. Instead, those dollars are at work in a thousand daily-life decisions [like Donna Smith's] -- about jobs, medical care, housing, food and exercise -- with a cumulative effect on longevity.

"Why might income have an effect on morbidity or mortality?" said David Kindig, an emeritus professor at the University of Wisconsin School of Medicine and an expert in longevity issues. "We have these causal pathways, through better jobs, better health insurance, better choice of behaviors, he added. On top of that, "there's the stress effects of poverty and low educational status."

[T]he contrast between McDowell and Fairfax shows just how deeply entrenched these trends are, with consequences reaching all the way from people's pocketbooks to their graves.

Because markets. Go die![4]

NOTES

[1] The social experiment of the moment, squillionaires with big ideas , has yet to play out in the media. Too soon to tell!

[2] Until it's too late , but that is a theme for another day.

[3] Via a podcast from sadly decayed New Yorker . It's quite a treat to hear Herzberg and Remnick gradually allow themselves to dimly understand that they know literally nothing of the experience of the average person buying Obamacare because they have never had to buy their own insurance since they get it corporately (see Context #1).

[4] Again from Lowrey, a fine example of Rule #2:

"These things are not nearly as clear as they seem, or as clear as epidemiologists seem to think," said Angus Deaton, an economist at Princeton.

Just doing his job .

UPDATE Adding, I'm not claiming that I've synthesized the neo-liberal literature. My claim is that if you engage a neo-liberal in conversation on policy ("at the whiteboard"), at some point you will be able to reduce what they say to rule #1 as a premise and rule #2 as an injunction, given the asymmetrical contexts #1 and #2. It's rather like the famous headline "Ford to City: Drop Dead," but on a society-wide scale, and with the 0.01% in the place of Ford.


Leonidas , March 17, 2014 at 8:40 am

My favorite quote regarding supply-demand curves goes something like "Like unicorns, supply-demand curves are often drawn but never seen in reality". From the book Economyths. A highly entertaining and readable debunking of neoclassical economics theory.

Ulysses , March 17, 2014 at 8:58 am

What a superb post! I particularly enjoyed how you correctly identified "parasitical rent extraction" as the preferred modus operandi of the 1% and their enablers.
How could we boil down an ideology opposed to neoliberalism?
1) Because humanity. We are all brothers and sisters who should care for one another.
2) Go live in joy and harmony. Caring for one another, and the health of our environment, we can enjoy living and creating together in an atmosphere free of undue stress and strife.

Jagger , March 17, 2014 at 10:29 am

Absolutely. Now go read the story about "How One City turned Poverty into a Prison Sentence" in the links section. It is a case study of rent extraction with jail as the final profit making solution when the poor are sucked dry. Money and politicians have so corrupted our democracy that it has become predatory. The political system is broke and I really don't see any real solutions to breaking the grip of those corrupting the system.

Vatch , March 17, 2014 at 11:49 am

I haven't had time to read much of what's in NC today, but I did read part of the Poverty/Prison article. Absolutely infuriating! When people can't pay their fines, community service should be an option. But I guess private companies don't make any profits from community service.

Alejandro , March 17, 2014 at 12:32 pm

"The political system is broke and I really don't see any real solutions to breaking the grip of those corrupting the system."

"I can UNDERSTAND pessimism, but I don't BELIEVE in it. It's not simply a matter of faith, but of historical EVIDENCE. Not overwhelming evidence, just enough to give HOPE, because for hope we don't need certainty, only POSSIBILITY."-Howard Zinn

McMike , March 17, 2014 at 2:02 pm

Note: the poor person is not the only one sucked dry, and that's not even the main point.

The goal of the prison industrial complex is to suck the middle class dry through privatized taxpayer funded prisons.

digi_owl , March 17, 2014 at 9:05 am

I found myself wondering if CIA has been acting as the "PR" office for this mentality, ever since the days of the Dulles brothers

Banger , March 17, 2014 at 9:24 am

Indeed they have–Operation Mockingbird started it all and then metastasized into our current completely controlled "press" (the Mightier Wurlitzer).

James Levy , March 17, 2014 at 9:06 am

I think "because markets" was abetted by the Left-Liberal "postmodern turn" of the 1970s and 80s. The Civil Rights and Anti-War movements had a hard moral center. Biting into them could crack teeth. Postmodernism and certain kinds of multiculturalism were gooey all the way through. They allowed the professoriate and the outside intellectuals to not have to make moral distinctions and moral choices. Everything could be analyzed (thus boosting publication output) and no hard work of condemnation, organization, or resistance need happen, because language was indeterminate, morals relative, and knowledge suspect. Surrender to the market was a way for a bunch of soft, queasy people to not have to make hard choices and defend them (such defense, in the ideological mood of the day, being a sign of a lack of "sophistication", "philosophical rigor", and "nuance", and an indicator of "crude" thinking–in other words, you'd be seen as a naive dunce not worth being granted tenure).

And, if you were one of those profs who could parlay the latest methodology into a big, splashy list of publications and exploit the burgeoning star system, the market was very, very good to you. So why ask such vulgar materialistic questions about economic outcomes when you could add a gay black woman to your syllabus and feel like you were "exploding the canon", "fighting the power", and "sticking it to the Man"?

Banger , March 17, 2014 at 9:27 am

Wow! I think your critique is spot on. The rot starts, in many ways, with the U.S. intellectual class that has been, largely, silenced and/or assigned to mediocre endeavors as you suggest.

Ulysses , March 17, 2014 at 10:24 am

Yes. As Chris Hedges noted some time ago:

"Universities no longer train students to think critically, to examine and critique systems of power and cultural and political assumptions, to ask the broad questions of meaning and morality once sustained by the humanities. These institutions have transformed themselves into vocational schools. They have become breeding grounds for systems managers trained to serve the corporate state. In a Faustian bargain with corporate power, many of these universities have swelled their endowments and the budgets of many of their departments with billions in corporate and government dollars. College presidents, paid enormous salaries as if they were the heads of corporations, are judged almost solely on their ability to raise money. In return, these universities, like the media and religious institutions, not only remain silent about corporate power but also condemn as "political" all within their walls who question corporate malfeasance and the excesses of unfettered capitalism."
http://www.truthdig.com/arts_culture/item/the_death_of_the_liberal_class_20101029

allcoppedout , March 17, 2014 at 11:05 am

Universities used to teach only a small number (5% when I went) and HE has expanded to a target of 50%. I don't wear the better days argument implicit in this. Standards have dropped so far it's hard to teach anything conceptual and most staff wouldn't be up to it. I suspect universities were never much good and people got better education in jobs with decent firms. And what of virtue ethics and other such clap-trap? Most of the prats who came up with that didn't challenge slavery. The German elite got bildung which helped them not at all to resist the Nazis. Scientists get none of that rot and turn out more generally ethical and leftist than the rest of HE output.

Lambert Strether , March 17, 2014 at 12:50 pm

I think that's very perceptive and I agree. I always knew the deconstructionists were up to no good -- readers will correct me but my impression is they destroyed English Department after English Department -- but your comment reminds how very no good their "no good" was.

MikeNY , March 17, 2014 at 8:20 pm

I daresay Harold Bloom would concur!

readerOfTeaLeaves , March 18, 2014 at 10:44 pm

Agreed.
They destroyed English departments, but the destroyers got tenure tracks and a lot of goodies, so perhaps like death by carbon monoxide poisoning, they were largely (and arrogantly, in a few cases that I've seen UpCloseAndPersonal) oblivious of the harm their sanctimonious behavior created.

Waves , March 17, 2014 at 9:54 am

Krugman totally nails it. Because he rocks.
Here's the link:
http://www.nytimes.com/2014/03/17/opinion/krugman-that-old-time-whistle.html?ref=paulkrugman

@Lambert Strether
You nailed it, too, but I personally would have changed "markets" to "psychotic parasitical greed and lust", but that is probably too long. I guess one word is the limit. *sigh*

Lambert Strether , March 17, 2014 at 12:56 pm

Krugman writes: "economic opportunity has shriveled for half the population." I'd like to see a little acknowledgment that NAFTA had something to do with that. And since trade is Krugman's bailiwick, I'd like to see a full-throated denunciation of TPP, instead of that lame promise to do "homework" (in his own field?!) followed by a nothing-burger of a column.

Krugman talks a good game. He's still a card-carrying member of the political class, and a supporter of ObamaCare, which is a "Because markets. Go die!" solution if ever I've seen one, which is covered in the post .

Dan Kervick , March 17, 2014 at 1:51 pm

Yeah, they are all trying to carry water for The Party while grudgingly admitting that the buckets are full of holes, or pretending that it's only the other guys who are carrying the buckets.

Banger , March 17, 2014 at 10:51 pm

Of course he's a member of the political class! You don't get to write for the NYT if you aren't–not any more. Look the mainstream Party Line is the only game in town. Who will be there for him when he loses his place at the table? The left has not made it easy for people to turn left–where is the funding, the organization and so on? The mainstream Washington consensus is all there is right now–TINA is a reality because the left perpetually sleeps and believes that cries of "it's not fair!" are enough.

TK421 , March 17, 2014 at 10:08 am

" Because markets."

Can't I go anywhere without seeing internet speak?

Thor's Hammer , March 17, 2014 at 11:28 am

Neo-liberal is a wuss phrase invented by guilt ridden liberals to avoid using the word that truly describes the state of affairs.
"Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power"
― Benito Mussolini
"We have buried the putrid corpse of liberty"
― Benito Mussolini

Vatch , March 17, 2014 at 11:58 am

Please don't think that I am defending either Neo-Liberalism or Fascism; I'm not. Both are odious. But it's not clear that Mussolini actually said that about corporatism, since that appears to be a mistranslation of the Italian word "corporatzione" See WikiQuote on Mussolini's Disputed Quote :

"Fascism should more properly be called corporatism, since it is the merger of state and corporate power."

This misunderstanding of the meaning of 'corporatzione' spread rapidly in the United States after appearing in a column by Molly Ivins (24 November 2002). It is repeated often and sometimes attributed to the "Fascism" entry in the 1932 Enciclopedia Italiana, but does not appear there. See "Mussolini on the Corporate State" by Chip Berlet which discusses the corporatzione – councils of workers, managers and other groups set up by the Fascist Party to control the economy and everyone in it.

Here's the Chip Berlet article . Since I don't speak Italian, I don't know what the truth about this is. Perhaps an NC reader who is fluent in Italian can comment for us.

nobody , March 17, 2014 at 12:25 pm

According to Guido Preparata:

Fascism's corporativismo was something altogether different -- the corporazioni were State-mandated guilds; it's another story, entirely. What we have in the US, instead, is a system governed by an ever more oligarchically-diseased, and outwardly aggressive, bureau-technocracy, which, internally, presides over a gradual privatization of public-functions, a sweeping commercialization of all spiritual endeavors (higher learning and the arts), and a virtual monopolization (corporatization) of all economic activity.

http://www.larsschall.com/2012/06/10/the-business-as-usual-behind-the-slaughter/

MaroonBulldog , March 18, 2014 at 12:09 am

Thepolitical idea of "corporatism" was not original to Mussolini, but is far older. In shortest form, a "corporatist" state was one in which persons were represented as members of a particular class, as opposed to a "representative state" where persons were represented as residents of a particular geographical community. In crude form, plumbers would be represented in the councils of state by a plumber, veterinarians by a veterinarian, etc. The Wikipedia article under this entry describes some of the 19th century intellectual history of this political idea

grayslady , March 17, 2014 at 2:29 pm

Agreed. Totally trendy and juvenile. Belongs in the same category as "Let's do lunch." English is a rich language, offering many word choices with which to craft a scathing critique without resorting to slang.

hunkerdown , March 17, 2014 at 4:23 pm

Because bourgeois affectations?

grayslady , March 17, 2014 at 4:44 pm

Since when has the proper use of language become a bourgeois affectation? Did I miss the announcement?

different clue , March 18, 2014 at 2:47 am

If one wishes to reach the non-bourgeoisly non-affected, one must resign oneself to the necessity of using non-bourgeois non-affectations.

Maynard Witherell , March 17, 2014 at 10:30 am

While I am (I think) in agreement with you, this is one of the most obfuscatory (your word) articles I have looked at on NC for awhile. Preaching to the choir is one thing (I am, after all, in that choir), but all that grammatical analysis that morphs into economic analysis may be cute but is just unnecessary. Please write more clearly next time!

allcoppedout , March 17, 2014 at 10:49 am

I didn't understand why anyone would want a crispy cream doughnut.

Lambert's walk through is very similar to modern work on argument. We tend to avoid best argument and just do easy ones with obvious "evidence", which is pretty dumb as data and theory spin together and there is no neutral observation language. Markets equate with 'suck it and see'. Neo-liberalism is well over 2000 years old. It's essence is lying. Machiavelli described it well. You say a pile of liberal 'dulldung' in public expressing your princely virtue and act as a ruthless bastard behind the scenes, trading on insider information and keeping savage attack dogs fed with the profits. Virtue ethics are extensively taught to an elite cadre in a system supported by slaves. Honesty is the best policy is taught alongside the need to lawyer up and deceive the enemy with clever strategies. You really are a decent person but have to fight the shameless enemy on her own terms.

Neo-liberalism is profoundly non-scientific and non-modern. Even if markets were real, we would want to do experiments that didn't ground out in them to find out how to change or maintain them. I'm afraid those of us who know E = MC2 isn't very important in relativity (excellent link the other day) rarely get arsed with economics and politics. They just aren't where we'd start to try and get a reasonable society going, given the chance. And both lack the show and tell we like.

A major ruse in neo-liberalism is to turn arguments about change into fantasies requiring a totally remodelled world-view. I know Kuhn used the term paradigm in this sense, but he'd stuffed that before his second edition and was talking 'disciplinary matrices', which wasn't half as catchy. This ruse disguises the fact that most critique really just asks 'where's your evidence'? In primitive societies, there is more murder than civilisation can match through war, at least before some clown pops off a hydrogen bomb or biological wizardry. Do we leave murder to Mr Market? There are many other examples we don't cede to market throws of the dice.

Neo-liberalism works by shouting loud. It might do us good to work out what our role in the performance of the Naked Emperor is. Drowning out the voice of the child shouting he is naked with clever critique?

cat , March 17, 2014 at 11:00 am

"That donut cost her 27 baht -- 84¢, 5¢ more than the US, in a city with half the cost-of-living of New York! So, what's going on? To her, Krispy Kreme donuts are a luxury good. How does she know that?"

The cost of living has little to nothing to do with if the cost to produce, sell, and profit from a Krispy Kreme donut in Thailand vs NYC. This is either the same terrible critical thinking skills you accuse the neo-liberals of possessing or easily dismissible sophistry.

The demand curve is a good starting point for discussing Economics because it starts the conversation about what really goes into the price of a good and the cost/willingness of its consumption.

I notice you don't present an alternate.

Lambert Strether , March 17, 2014 at 12:45 pm

I feel satisfied to have shown that neo-liberalism is false and lethal. I notice you don't dispute that. I don't see why I have to present an alternative. In any case, I don't do assignments.

allcoppedout , March 17, 2014 at 8:34 pm

Yes you do Lambert. So do I. We just mark our own these days. Important to say critique doesn't need an alternative. Sadly, you have not slain the neo-blobby dragon and it will be round for the rent tomorrow. Somehow we need to trick it into a knife fight when we have pistols. One of the neo-clogger gun batteries is this 'what's your alternative' stuff. We should not go Light Brigade. The truth here is they prevent alternatives and practise sacking raids on any established.

It would be interesting to see speculation in here concerning what life would be like with guaranteed income set at three squares and a roof over one's head. I'm particularly interested in employee relations and what real motivation to work is.

hunkerdown , March 17, 2014 at 4:29 pm

And the sale price of a donut has nothing necessarily to do with the cost of production and sales, so long as there is a sufficiently fashionable level of profit in doing so. Anecdotal evidence still beats a priori assertion.

hunkerdown , March 17, 2014 at 4:35 pm

And furthermore, "presenting an alternate" is simply abrogation of responsibility in the form of a romantic prayer, most often deployed by those whose social identity and/or access to power are directly or indirectly threatened by the criticial analysis in progress.

In other words, it's begging the question "because markets".

huxley , March 17, 2014 at 4:39 pm

Price distortions are the result of market inefficiencies which can be contrived in any number of ways to enable rent extraction. You're invited to confess to your own favorite methods.

Ben Johannson , March 17, 2014 at 9:27 pm

The demand curve is a meaningless abstraction. Draw two intersecting lines to reflect your assumptions and you too can teach at Harvard.

readerOfTeaLeaves , March 18, 2014 at 10:50 pm

Bless you for that moment of sanity.

HotFlash , March 17, 2014 at 12:38 pm

That you for this elegantly written essay, Lambert.

Scot Griffin , March 17, 2014 at 1:40 pm

You really only need one rule to sum up neoliberalism: "If you are not at the table, you are on the menu."

I first heard that from a K Street lobbyist who helped write the ObamaCare bill for PhRMA, his employer at the time.

Of course, to have a seat at the table, you need to be economically powerful and politically connected.

impermanence , March 17, 2014 at 2:04 pm

Lambert, economize on your verbiage

People want, 'something for nothing;' and the few are willing to do whatever it takes to this end.

JEHR , March 17, 2014 at 3:18 pm

Lambert, your mind is as sharp as a razor today.

huxley , March 17, 2014 at 4:31 pm

The supply-demand diagram as shown is inaccurate. As such it is an effective demonstration of lying by omission.

To correctly model real-world markets it needs to show how the supply and demand curves are shifted through industry collusion, improper government mandates, and other market distortions and manipulations. It needs to show how prices are increased through market inefficiencies and how economic rent is contrived. It needs to demonstrate the differences between a non-profit utilitarian system, a competitive system that allows for a normal profit, and one that is perverted to enable rent extraction.

The diagram as shown doesn't do any of these things, and a corporate con artist who tries to fob off such a thing on you needs to be taken to school about their ignorance of economics and their propensity for blatant dishonesty and thievery. You certainly don't want such a pirate to get away with using the Blinding With Science fallacy on you when it's fairly straightforward to expose the lying for what it is with just a little standard explanatory material.

casino implosion , March 17, 2014 at 4:42 pm

I've heard the "narcissism of small differences" theory before but I don't think I buy it. The differences are large, but they're the Yankee/Cowboy War differences detailed by Oglesby, not a disagreement over any of the main points of the Washington Consensus..

James Levy , March 17, 2014 at 5:21 pm

The war between the Eastern Establishment and the Cowboy Capitalists largely ended when the factions called a truce in 1980 and put Bush and Reagan on the ticket. Since then the transnational globalizing elite have pretty much buried those old cohorts or coopted them. The Tea Party and Fox News are the last refuges of the Cowboys, along with the nitwits at Commentary. But I think that the biggest players no longer see the United States as the exclusive or even primary stage on which capital is to be accumulated and deployed. America now functions primarily as rent collector and strike breaker.

participant-observer-observed , March 17, 2014 at 5:34 pm

Nice work!

For an even more amusing but pessimistic view, kindly enjoy:

The Idiot's Guide to Smart People: Politics (Ep. 1 of 3)

http://www.youtube.com/watch?v=R72atCX4leY&list=PLrEnWoR732-AOme6RPPtbO_eQzyz6yxto

E Williams , March 17, 2014 at 6:43 pm

Rule 2 reminds me of the title of H Rap Brown's autobiography, written fifty years ago.

"I lived near Louisiana State University, and I could see this big fine school with modern buildings and it was for whites. Then there was Southern University, which was about to fall in and that was for the niggers. And when I compared the two, the message that the white man was trying to get across was obvious Die Nigger Die."

V. Johnson , March 17, 2014 at 7:26 pm

"1. Because Markets", "2. Go Die!".

Perfection. That really sums it up doesn't it? Best explanation of neoliberalism ever. It's almost Haiku.

FYI I found this the other day, same thing from a different angle:

http://globuspallidusxi.blogspot.com/2014/01/market-failure.html

skippy , March 17, 2014 at 9:27 pm

A comment – Jordan P Soreff #3 Be quiet and civil while going about #2 Because Markets. -- Lovely weather we're having. Did you see Miley Cyrus? OMG Dead as a doornail.

skippy bawhahahaha~

different clue , March 18, 2014 at 2:53 am

One might call them Rules for the Masses, not the Classes.
Because markets.
Go die! (because Georgia Guidestones).

[Aug 30, 2018] Corporate Welfare Lives On and On

Aug 30, 2018 | www.theamericanconservative.com

From farm subsidies to the Export-Import Bank, special interest feeding frenzies are still the norm throughout government. By DOUG BANDOWAugust 29, 2018

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Congress created the usual special interest frenzy with its latest iteration of the farm bill. Agricultural subsidies are one of the most important examples of corporate welfare -- money handed out to businesses based on political connections. The legislation suffered a surprise defeat in the House, being viewed as too stingy. But it is certain to return.

Fiscal responsibility is out of fashion. The latest federal budget, drafted by a Republican president and Republican-controlled Congress, blew through the loose limits established under Democratic President Barack Obama. The result is trillion-dollar deficits as far as the eye can see.

Spending matters. So does the kind of spending. Any amount of corporate welfare is too much.

Business plays a vital role in a free market. People should be able to invest and innovate, taking risks while accepting losses. In real capitalism there are no guaranteed profits. But corporate welfare gives the well-connected protection from many of the normal risks of business.

Business subsidies undermine both capitalism and democracy. Allowing politicians to channel economic resources toward their preferred ends distorts investment and trade. Moreover, turning government into an engine of illicit profit encourages what economists call rent-seeking. Well-organized special interests usually triumph over the broader public and national interest.

Explained Mercatus scholar Tad DeHaven, then a budget analyst at the Cato Institute: "Corporate welfare often subsidizes failing and mismanaged businesses and induces firms to spend more time on lobbying rather than on making better products. Instead of correcting market failures, federal subsidies misallocate resources and introduce government failures into the marketplace."

While corporate welfare suggests money for big business, firm size is irrelevant. There is no substantive difference between, say, the Small Business Administration and the Export-Import Bank. Both turn capitalism into a rigged game of Monopoly.

Beltway Bandits, Cronyism, and the DOD's Exclusive Contracts The Ultimate Trifecta of Crony Capitalism

Aid comes in many forms. There is spending, typically in grants, loans, and loan guarantees; limits on competitors, such as tariffs and quotas; tax preferences, attached to broader tax bills to benefit individual companies and industries. All help ensure business profits.

Agriculture in particular has spawned a gaggle of sometimes bizarre subsidies. Payments, loans, crop insurance, import quotas, and more underwrite farmers. When these distort the marketplace, further efforts are concocted to address those dislocations. A dairy program created milk surpluses, which in turn encouraged state price fixing that generated massive cheese stockpiles, in turn triggering giveaways to the poor. The federal government killed off cows even as it continued to subsidize milk.

Money also goes to agricultural enterprises through the Rural Business-Cooperative Service, which supports "business development." Through it, observed the Cato Institute's Chris Edwards, Washington subsidizes "utilities, housing developers, and a vast range of other businesses, such as auto shops, tractor companies, clam producers, carwashes, and pharmaceutical firms." The defeated farm bill even included $65 million in special health care subsidies for agricultural associations. Ironically farm households enjoy higher median income and wealth than non-farm households.

The Market Access Program subsidizes agricultural exports. So do the Emerging Markets Program and Foreign Market Development Program. Other programs support general trade and investment. For instance, the Export-Import Bank is known as Boeing's Bank. It provides cheap credit for foreign buyers of American products. Ironically this gives foreign firms, such as airlines that purchase Boeing airplanes, an advantage over U.S. carriers, which must pay full fare. Ex-Im's biggest beneficiary in recent years has been China, especially its state-owned firms.

Contrary to its claims, Ex-Im is not vital for American exports: it backs fewer than 2 percent of them. Around 10 companies benefit from roughly two thirds of the organization's largesse. Ex-Im likes to say it makes money. But the real cost is channeling economic resources to the politically favored.

The Overseas Private Investment Corporation provides another carefully camouflaged subsidy. OPIC underwrites U.S. investment -- recipients have ranged from Papa John's Pizza to the Ritz-Carlton -- in potentially unstable nations. If the project pays off, investors win. If not, the rest of us lose. OPIC's real cost includes channeling business investment into protected regions and industries. American businesses hoping to make money in foreign markets should not expect American taxpayers to guarantee those profits.

♦♦♦

At the other end of the commercial spectrum is the Small Business Administration. Smaller firms are a vital part of the American economy and play an important cultural, community, and family role. Yet small businesses are not an underserved market. There is no dearth of, say, liquor stores, bakeries, or antique shops. (Personally, I would love to see an antique shop on every street corner.) SBA is a response to a political opportunity, not an economic need.

Much corporate welfare is disguised in broader terms. The Commerce Department's Economic Development Administration subsidizes "development" in "distressed communities," meaning the agency underwrites business, with dubious results. The Department of Housing and Urban Development's Community Development Block Grants do much the same. So does the Appalachian Regional Commission. Cato's Chris Edwards complained that "these are pork-barrel handouts, not proper federal activities." There are some 180 "economic development" programs of one sort or another.

The Rural Utilities Service (once the Rural Electrification Administration) continues, never mind that rural America got electricity decades ago. Today RUS underwrites service in wealthy resort areas and has expanded into broadband internet and even television service. The Federal Communications Commission has several programs to subsidize phone service. The Commerce Department includes the Minority Business Development Agency, which underwrites companies that qualify as minority-owned.

The Bureau of Land Management (mis)manages federal lands, subsidizing use of rangeland by ranchers, for instance. There are federal subsidies to develop, finance, and promote fisheries. There are incentives for airline companies to serve small markets. Foreign Military Financing is presented as a national defense measure, but in most cases the chief beneficiaries are arms makers. There is money to develop high-speed rail and aid shipyards, while the Jones Act imposes huge costs on consumers to preserve expensive U.S. merchantmen.


♦♦♦

There are many housing subsidies, most notably mortgage support and tax preferences, though the latter were trimmed by last year's tax bill. Federal Reserve monetary policy also is a massive subsidy for housing industry enterprises and other asset-based businesses. The Trump administration is pushing subsidies for what the president calls "beautiful" coal power plants.

Federal research and development outlays also offer bountiful benefit to business. The more basic the R&D, the better the argument that the public interest is being served. But even there, warned DeHaven, "the government's basic research can be unproductive and pork-barrel in nature." The closer to commercialization, the more the expenditures are essentially corporate welfare. Alas, Uncle Sam has a hideous record of choosing winners and losers. Most often he chooses the politically influential, which can mean picking losers.

That certainly was the case in the area of "green" energy, for instance. The Obama administration funneled $535 million worth of loan guarantees to Solyndra, which President Barack Obama called an "engine of economic growth." The company filed for bankruptcy in 2011 after spending $1.8 million on its Washington lobbyists. The Washington Post later reported that $3.9 billion in Energy Department grants and financing flowed to 21 companies backed by firms connected to five Obama administration staffers and advisers.

The Advanced Technology Vehicles Manufacturing program provides $25 billion in loans for development of cars powered by alternative fuels. Tesla is a major beneficiary. Some players enjoy multiple benefits. DeHaven pointed to Enron, which "received billions of dollars in aid for its projects from the Export-Import Bank, the Overseas Private Investment Corporation, the U.S. Trade and Development Agency, the U.S. Maritime Administration, and other agencies." When the firm collapsed taxpayers were stuck with several bills.

Although most public attention falls on direct expenditures, trade "protection" is no less a form of corporate welfare. Both tariffs and quotas allow domestic manufacturers to charge more for their products. Unfortunately, the cost of this form of corporate welfare is hidden from the public. Tariffs and other fees alone come to around $40 billion a year. Estimating the cost of quotas and other non-financial restrictions is much harder.

♦♦♦

Tax preferences are another means of corporate welfare. Buried in the tax code, they often are difficult to identify. Measures that affect only one firm or industry, in contrast to those with general economic impact, should be treated as subsidies. Some measures are both, such as the mortgage interest deduction.

The Tax Foundation once calculated that "special tax provisions" cost more than $100 billion annually in lost revenue. Toss in just the mortgage interest deduction and the total jumps dramatically. Although last year's tax bill covered important policy issues, it also incorporated more than a few preferences called "tax extenders."

States and localities also offer subsidies, many through grants, free property, and tax preferences to attract businesses to a particular area. The New York Times pointed to the case of General Motors: "For years, mayors and governors anxious about local jobs had agreed to G.M.'s demands for cash rewards, free buildings, worker training and lucrative tax breaks." Estimates of these costs run between $50 billion and $80 billion.

With the annual federal deficit again approaching $1 trillion, ending corporate welfare alone would not restore fiscal sanity in Washington. But it would be a good down payment. Killing corporate welfare also would help answer the question: does the system operate only for the influential and elite? Ending welfare for profit-making companies should be a starting point for any effort to balance the budget.

Doug Bandow is a senior fellow at the Cato Institute. A former special assistant to President Reagan, he is author of The Politics of Plunder: Misgovernment in Washington .

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nothing changed August 29, 2018 at 3:02 am

"Ending welfare for profit-making companies should be a starting point for any effort to balance the budget. "

At least these are American companies.

What blows my mind is that the top three "foreign aid" parasites under Trump are the same as under Obama. Israel, Afghanistan, and Egypt.

Billions.

So much for "America First" and kicking freeloaders off the taxpayer dole.

Mark Thomason , says: August 29, 2018 at 10:37 am

The Import-Export Bank helps little guys compete with big guys. It provides resources for international payments that otherwise are too expensive to set up for smaller transactions and smaller buyers and sellers.

The attack on the Bank is an attack in support of monopoly power of the biggest companies that can afford to do it for themselves (and only for themselves).

SteveM , says: August 29, 2018 at 11:09 am

It's imperative not to leave out the MIC. No matter much the defense contractors screw up they are always invited back to the FedGov trough to screw up some more. Recent acquisition catastrophes include:

F-22
F-35
Littoral Combat Ship
Zumwalt Class Destroyer
Army Future Combat System

There are scores of others. Do a search on almost any platform the Pentagon sought to acquire and "boondoggle" to see what kind of economic wreckage surfaces.

What gets me is the Generals and Admirals who testify in front of Congress and wail about the "hollowed out force structure" when the original program plans for all weapons systems had plenty of platforms being delivered at a notionally affordable cost.

Begging for more money for programs when those same Brass screwed up the oversight of the ones that are busted reminds me of the kid who kills his parents and then throws himself at the mercy of the court because he's an orphan.

And the Pentagon Brass is really fronting for the defense contractors they want to work for when they get out. It's all a Corporate Welfare scam.

Nobody can hold a candle to the 5-Sided Pleasure Palace when it comes to Corporate Welfare.

TJ Martin , says: August 29, 2018 at 11:59 am

A challenge . Name one solitary major industry in the US that does not receive massive tax payer funded subsidies . Think you know the answer ? All bets are your wrong . So lets take a look at the worst of the worst receiving the most amount of tax payer dollars in what can only be described as corporate welfare ;

1)Energy ( e.g. The Oil / Petrochemical industry along with coal and nuclear )

2) Arms industry ( both military and civilian )

3) Commercial and to a lesser extent residential developers and builders ( hint hint recently increased by the current administration )

4) AgraBusiness

5) Big Pharma

6) Auto Industry

7) Transportation ( e.g. the airlines )

8) Communications ( e.g. satellite and cable tv . land line & cell phone providers , internet providers )

All en total or in part fully supported by a GOP unwilling to provide so much as reasonable healthcare to the general public while spending billions of our dollars on corporate welfare

In conclusion another challenge . In light of the above irrefutable facts .. where is the genuine conservatism so many conservatives make claim to ?

One Guy , says: August 29, 2018 at 1:28 pm

Money for votes, i.e., "the swamp". It was bad enough, before Trump, but now it's worse.

balconesfault , says: August 29, 2018 at 1:34 pm

For instance, the Export-Import Bank is known as Boeing's Bank. It provides cheap credit for foreign buyers of American products. Ironically this gives foreign firms, such as airlines that purchase Boeing airplanes, an advantage over U.S. carriers, which must pay full fare.

Wow – that's a stretch.

I would like to see some real evidence that foreign carriers have been getting significantly lower interest rates on their loans than US carriers when purchasing planes from the Boeing factory.

Sure, there's a theoretical point there. But I've never seen one real world example, and I've not heard any of the domestic carriers complaining.

Meanwhile, thanks to Ex-Im, which costs US taxpayers nothing, Boeing and a lot of other businesses get to provide jobs to American workers.

I still will never understand the right wing hatred for a program that has helped American trade balance far more over the years than any of Trump's tariffs will ever do.

EliteCommInc. , says: August 29, 2018 at 4:03 pm

sign me up

[Aug 28, 2018] A Colony in a Nation by Chris Hayes

Highly recommended!
Notable quotes:
"... Here is an except from "A Colony in a Nation" by Chris Hayes that she recently discussed (Chris Hayes is also the author of Twilight of the Elites ) ..."
"... ...we have built a colony in a nation, not in the classic Marxist sense but in the deep sense we can appreciate as a former colony ourselves: A territory that isn't actually free. A place controlled from outside rather than within. A place where the mechanisms of representation don't work enough to give citizens a sense of ownership over their own government. A place where the law is a tool of control rather than a foundation for prosperity. ..."
"... A Colony in a Nation is not primarily a history lesson, though it does provide a serious, empathetic look at the problems facing the Colony, as well as at the police officers tasked with making rapid decisions in a gun-rich environment. ..."
"... Elsewhere, Hayes examines his own experiences with the law, such as an incident when he was almost caught accidentally smuggling "about thirty dollars' worth of marijuana stuffed into my eyeglass case" into the 2000 Republican National Convention. Hayes got away without so much as a slap on the wrist, protected by luck, circumstances and privilege. ..."
Mar 23, 2017 | economistsview.typepad.com
"Listening to this show by MSNB is so disguising that I lost any respect for it. "

I actually jumped the gun. That's does not mean that it should not be viewed. There are some positive aspects of MSNBC http://www.msnbc.com/rachel-maddow-show

Here is an except from "A Colony in a Nation" by Chris Hayes that she recently discussed (Chris Hayes is also the author of Twilight of the Elites )

...we have built a colony in a nation, not in the classic Marxist sense but in the deep sense we can appreciate as a former colony ourselves: A territory that isn't actually free. A place controlled from outside rather than within. A place where the mechanisms of representation don't work enough to give citizens a sense of ownership over their own government. A place where the law is a tool of control rather than a foundation for prosperity.

... ... ...

A Colony in a Nation is not primarily a history lesson, though it does provide a serious, empathetic look at the problems facing the Colony, as well as at the police officers tasked with making rapid decisions in a gun-rich environment.

Hayes takes us through his less-than-successful experience putting himself in the latter's shoes by trying out an unusual training tool, a virtually reality simulator: "We're only one scene in, and already the self-righteous liberal pundit has drawn his weapon on an unarmed man holding a cinder block."

Elsewhere, Hayes examines his own experiences with the law, such as an incident when he was almost caught accidentally smuggling "about thirty dollars' worth of marijuana stuffed into my eyeglass case" into the 2000 Republican National Convention. Hayes got away without so much as a slap on the wrist, protected by luck, circumstances and privilege.

For black men living in the Colony, encounters with the police are much more fraught. Racial profiling and minor infractions can lead to "being swept into the vortex of a penal system that captures more than half the black men his age in his neighborhood... an adulthood marked by prison, probation, and dismal job prospects...."

[Aug 07, 2018] Trillion Dollar Companies the Apple Empire and Concentrated Markets by Binoy Kampmark

Notable quotes:
"... New York Times ..."
"... The Four: The Hidden DNA of Amazon, Apple, Facebook and Google ), ..."
"... Power and influence has shifted. Political leaders have little of these relatively speaking, certainly over the behavioural consistency and content of subjects and citizens. Someone like Mark Zuckerberg, distinctly outside a political process he can still control, does. "He can turn off or on your mood. He can take any product up or down. He can pretty much kill any company in the tech space." And that's just Facebook. ..."
Aug 07, 2018 | www.counterpunch.org

It seems a distant reality, or nightmare now: a company that was near defunct in 1996, now finding itself at the imperial pinnacle of the corporate ladder. Then, publications were mournful and reflective about the corporation that gave us the Apple Computer. An icon had fallen into disrepair. Then came the renovations, the Steve Jobs retooling and sexed-up products of convenience.

Apple's valuation last Thursday came in at $1 trillion and may well make it the first trillion dollar company on the planet. That its assets are worth more than a slew of countries is surely something to be questioned rather than cheered. This un-elected entity, with employees versed in evading, as far as possible, the burdens of public accountability, poses a troubling minder about how concentrated financial power rarely squares with democratic governance.

Chalking up such a mark is only impressive for those keeping an eye on the trillion dollar line. China's state-owned PetroChina is another muscular contender for getting there first , while the Saudi Arabian energy company Aramco, which produces a far from negligible 10 percent of the world's oil, could well scoot past Apple should it go public.

Cheering was exactly what was demanded by James Pethokoukis of the American Enterprise Institute, whose piece in The Week suggests that Apple reached that mark "the right way". The critics of such concentrated power, technology company or otherwise, were simply wrong. "For them, superbig is automatically superbad."

Praise for Apple, an abstract being, is warranted in the way that its ally, modern capitalism, should be. "The story of Apple is really the story of modern capitalism doing what it does best: turning imagination into reality." The author prefers to see Apple, and Amazon, as products of US genius in the capitalist context.

The New York Times is similarly impressed, linking individual gargantuan successes to the broader American effort in the economy. A small gaggle of US companies commanding "a larger share of total corporate profits" than at any time since the 1970s, is not necessarily something to snort at. The nine-year bull market has, essentially, been powered by the four technology giants. "Their successes are also propelling the broader economy, which is on track for its fastest growth rate in a decade."

To its credit, the paper does pay lip service to concerns that such "superstar firms" are doing their bit to stifle wage growth, shrink an already struggling, barely breathing middle class, while jolting income inequality.

This is where the trouble lies: a seemingly blind understanding of capitalism's inner quirks and unstable manifestations. The paradox behind the tech giant phenomenon does not lie in the wisdom that innovation comes from competition. The converse is claimed to be true: that concentration, oligopolistic power, and strings pulled by a few players is the way to keep innovation alive. This was Microsoft's vain argument during the 1990s, something that did not sit well with the antitrust denizens.

The fraternity of economists, rarely capable in agreeing on broader trends, has become abuzz with literature focused on one unsettling topic: the continuing, and accelerating concentration of US industry. Gustavo Grullon, Yelena Larkin and Roni Michaely noted in April last year that government policies encouraging competition in industry had been "drastically reversed in the US" with a 75 percent increase in the Herfindahl-Hirschman index (HHI) measuring market concentration. (Antitrust regulators beware.) The authors observe how, "Lax enforcement of antitrust regulations and increasingly technological barriers to entry appear to be important factors behind this trend."

Marketing professor from NYU, Scott Galloway, is one who has supped from the cup of the tech giants. He has written about their exploits ( The Four: The Hidden DNA of Amazon, Apple, Facebook and Google ), his addresses having become something of a viral phenomenon with analyses of the companies at the DLD Conference in Munich. Initially seduced by the bling and the product, he enjoyed the magic mushroom inducements the tech giants supplied, relished in their success and stock options, extolled their alteration of human behaviour. "This started as a love affair. I want to be clear. I love these companies."

This year, a change of heart took place. Galloway, after spending "the majority of the last two years" of his life "really trying to understand them and the relationship with the ecosystem" is convinced that these behemoths must be broken up. The big four, striving all powerful deities, sources of mass adoration, have become "our consumptive gods". "And as a result of their ability to tap into these very basic instincts, they've aggregated more market cap than the majority of nation's GDP".

Power and influence has shifted. Political leaders have little of these relatively speaking, certainly over the behavioural consistency and content of subjects and citizens. Someone like Mark Zuckerberg, distinctly outside a political process he can still control, does. "He can turn off or on your mood. He can take any product up or down. He can pretty much kill any company in the tech space." And that's just Facebook.

What Galloway points out with a forceful relevance is that liberties and freedoms are not the preserve of estranged markets and their bullish actors. Regulation and oversight are required. A return to competition would only be possible through some form of intervention and coaxing, perhaps even economic violence. The memory of the great financial crisis initially stimulated an appetite for regulation. In recent years, such urgings have been satiated. The tech giants, fully aware of this, continue to burgeon.

[Aug 04, 2018] The US empire was always conducting trade wars that even included deliberately created cartels

Notable quotes:
"... These laws allow a company that believes a foreign rival is selling a product below cost to request that the government impose special tariffs to protect it. Selling products below cost is called dumping, and the duties are called dumping duties. Often, however, the U.S. government determines costs on the basis of little evidence, and in ways which make little sense. To most economists, the dumping duties are simply naked protectionism. Why, they ask, would a rational firm sell goods below cost? ..."
"... Cartels work by restricting output, thereby raising prices. O'Neill's interest was no surprise to me; what did surprise me was the idea that the U.S. government would not only condone a cartel but actually play a pivotal role in setting one up. He also raised the specter of using the antidumping laws if the cartel was not created. These laws allow the United States to impose special duties on goods that arc sold at below a "fair market value," and particularly when they are sold below the cost of production. ..."
"... The reality is that the US empire was always conducting trade wars that included not only tariffs on specific products, but even deliberately created cartels. ..."
"... In the early 90s the Clinton administration uncritically adopted the neoliberal doctrine from Ronald Reagan and continued the big fraud against the majority of the Americans. ..."
"... On the one hand, the Clinton administration was selling the big fairy tale of neoliberalism to the American public: free market capitalism would bring prosperity for all through that trickle-down fiasco. And it was translated, as always, in further cuts in public spending - more tax-cuts for the super-rich. On the other hand, behind the scenes, the same administration was implementing the most aggressive protectionism in favor of some US corporations and against consumers. ..."
Aug 04, 2018 | failedevolution.blogspot.com

Donald Trump is using his trade wars to support the part of the US capital that has heavily lost from free trade globalization, which is more powerful than ever in our days. This is also part of the Trump agenda to persuade Americans for his "patriotic devotion" based on his "America First" slogan.

The reality is that the US empire was always conducting trade wars that included not only tariffs on specific products, but even deliberately created cartels.

In the early 90s the Clinton administration uncritically adopted the neoliberal doctrine from Ronald Reagan and continued the big fraud against the majority of the Americans.

On the one hand, the Clinton administration was selling the big fairy tale of neoliberalism to the American public: free market capitalism would bring prosperity for all through that trickle-down fiasco. And it was translated, as always, in further cuts in public spending - more tax-cuts for the super-rich. On the other hand, behind the scenes, the same administration was implementing the most aggressive protectionism in favor of some US corporations and against consumers.

In his book Globalization and its discontents , Joseph Stiglitz describes how the United States under Clinton administration set up a cartel in favor of the US aluminum industry:

The United States supports free trade, but all too often, when a poor country does manage to find a commodity it can export to the United States, domestic American protectionist interests are galvanized. This mix of labor and business interests uses the many trade laws - officially referred to as "fair trade laws," but known outside the United States as "unfair fair trade laws"- to construct barbed-wire barriers to imports.

These laws allow a company that believes a foreign rival is selling a product below cost to request that the government impose special tariffs to protect it. Selling products below cost is called dumping, and the duties are called dumping duties. Often, however, the U.S. government determines costs on the basis of little evidence, and in ways which make little sense. To most economists, the dumping duties are simply naked protectionism. Why, they ask, would a rational firm sell goods below cost?

During my term in government, perhaps the most grievous instance of U.S. special interests interfering in trade - and the reform process - occurred in early 1994, just after the price of aluminum plummeted. In response to the fall in price, U.S. aluminum producers accused Russia of dumping aluminum.

Any economic analysis of the situation showed clearly that Russia was not dumping. Russia was simply selling aluminum at the international price, which was lowered both because of a global slowdown in demand occasioned by slower global growth and because of the cutback in Russian aluminum use for military planes. Moreover, new soda can designs used substantially less aluminum than before, and this also led to a decline in the demand.

As I saw the price of aluminum plummet, I knew the industry would soon be appealing to the government for some form of relief, either new subsidies or new protection from foreign competition. But even I was surprised at the proposal made by the head of Alcoa, Paul O'Neill: a global aluminum cartel.

Cartels work by restricting output, thereby raising prices. O'Neill's interest was no surprise to me; what did surprise me was the idea that the U.S. government would not only condone a cartel but actually play a pivotal role in setting one up. He also raised the specter of using the antidumping laws if the cartel was not created. These laws allow the United States to impose special duties on goods that arc sold at below a "fair market value," and particularly when they are sold below the cost of production.

I worked hard to convince those in the National Economic Council that it would be a mistake to support O'Neill's idea, and I made great progress. But in a heated subcabinet meeting, a decision was made to support the creation of an international cartel.

While I had managed to convince almost everyone of the dangers of the cartel solution, two voices dominated. The State Department, with its close connections to the old-line state ministries, supported the establishment of a cartel. The State Department prized order above all else, and cartels do provide order. The old-line ministries, of course, were never convinced that this movement to prices and markets made sense in the first place, and the experience with aluminum simply served to confirm their views.

Rubin, at that time head of the National Economic Council, played a decisive role, siding with State. At least for a while, the cartel did work. Prices were raised. The protfits of Alcoa and other producers were enhanced. The American consumers - and consumers throughout the world - lost, and indeed, the basic principles of economics, which teach the value of competitive markets, show that the losses to consumers outweigh the gains to producers. Donald Trump is using his trade wars to support the part of the US capital that has heavily lost from free trade globalization, which is more powerful than ever in our days. This is also part of the Trump agenda to persuade Americans for his "patriotic devotion" based on his "America First" slogan.

The reality is that the US empire was always conducting trade wars that included not only tariffs on specific products, but even deliberately created cartels.

In the early 90s the Clinton administration uncritically adopted the neoliberal doctrine from Ronald Reagan and continued the big fraud against the majority of the Americans.

On the one hand, the Clinton administration was selling the big fairy tale of neoliberalism to the American public: free market capitalism would bring prosperity for all through that trickle-down fiasco. And it was translated, as always, in further cuts in public spending - more tax-cuts for the super-rich. On the other hand, behind the scenes, the same administration was implementing the most aggressive protectionism in favor of some US corporations and against consumers.

In his book Globalization and its discontents , Joseph Stiglitz describes how the United States under Clinton administration set up a cartel in favor of the US aluminum industry:

The United States supports free trade, but all too often, when a poor country does manage to find a commodity it can export to the United States, domestic American protectionist interests are galvanized. This mix of labor and business interests uses the many trade laws - officially referred to as "fair trade laws," but known outside the United States as "unfair fair trade laws"- to construct barbed-wire barriers to imports.

These laws allow a company that believes a foreign rival is selling a product below cost to request that the government impose special tariffs to protect it. Selling products below cost is called dumping, and the duties are called dumping duties. Often, however, the U.S. government determines costs on the basis of little evidence, and in ways which make little sense. To most economists, the dumping duties are simply naked protectionism. Why, they ask, would a rational firm sell goods below cost?

During my term in government, perhaps the most grievous instance of U.S. special interests interfering in trade - and the reform process - occurred in early 1994, just after the price of aluminum plummeted. In response to the fall in price, U.S. aluminum producers accused Russia of dumping aluminum.

Any economic analysis of the situation showed clearly that Russia was not dumping. Russia was simply selling aluminum at the international price, which was lowered both because of a global slowdown in demand occasioned by slower global growth and because of the cutback in Russian aluminum use for military planes. Moreover, new soda can designs used substantially less aluminum than before, and this also led to a decline in the demand.

As I saw the price of aluminum plummet, I knew the industry would soon be appealing to the government for some form of relief, either new subsidies or new protection from foreign competition. But even I was surprised at the proposal made by the head of Alcoa, Paul O'Neill: a global aluminum cartel.

Cartels work by restricting output, thereby raising prices. O'Neill's interest was no surprise to me; what did surprise me was the idea that the U.S. government would not only condone a cartel but actually play a pivotal role in setting one up. He also raised the specter of using the antidumping laws if the cartel was not created. These laws allow the United States to impose special duties on goods that arc sold at below a "fair market value," and particularly when they are sold below the cost of production.

I worked hard to convince those in the National Economic Council that it would be a mistake to support O'Neill's idea, and I made great progress. But in a heated subcabinet meeting, a decision was made to support the creation of an international cartel.

While I had managed to convince almost everyone of the dangers of the cartel solution, two voices dominated. The State Department, with its close connections to the old-line state ministries, supported the establishment of a cartel. The State Department prized order above all else, and cartels do provide order. The old-line ministries, of course, were never convinced that this movement to prices and markets made sense in the first place, and the experience with aluminum simply served to confirm their views.

Rubin, at that time head of the National Economic Council, played a decisive role, siding with State. At least for a while, the cartel did work. Prices were raised. The protfits of Alcoa and other producers were enhanced. The American consumers - and consumers throughout the world - lost, and indeed, the basic principles of economics, which teach the value of competitive markets, show that the losses to consumers outweigh the gains to producers.

http://digamo.free.fr/stig2002

It was the time where the Democrats had become Republicans and the US bipartisan dictatorship was established for good to serve the corporate America.

https://youtu.be/8d1ibtOVImg

[Jul 30, 2018] Google Bitten by 2nd Antitrust Fine in the EU, $5 Billion, Hugest Ever Anywhere. Third Waiting in the Wings by Lambert Strether

Notable quotes:
"... By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street. ..."
"... But don't cry for Google. These practices helped it earn it a net profit of $12.7 billion in 2017 and of $19.5 billion in 2016. The decision and a fine of enormous magnitude has been expected. And Google's shares are currently flat for the day. ..."
"... "The decision and a fine of enormous magnitude has been expected. And Google's shares are currently flat for the day." ..."
"... An unlocked phone direct from the mfg instead of the carrier will have fewer apps. Also you can disable many apps, just ignore the "may cause other apps to misbehave " message; it isn't true. Some of the apps you do need, and online forums will list which you need and which you don't. ..."
"... if you can quit FB cold turkey you can reduce your exposure to Google. For example I went back to using a paper calendar. ..."
"... LineageOS is a current Android version and not several years old like with earlier Moto G versions, it gets up to date security patches, has no spyware. You can even install only the Google Apps you want, and can delete or uninstall pretty much anything. Especially on older phones with limited storage this is a godsend. ..."
Jul 19, 2018 | www.nakedcapitalism.com

Lambert here: The EU doesn't mess around, does it?

By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street.

In the US, the internet giants – Google, Facebook, Amazon, et al. – can do pretty much as they please, interrupted only by occasional hearings in Congress, where Mark Zuckerberg, or whoever, has to grin-and-bear it for a few hours, knowing that this too shall pass. The EU takes antitrust actions against super-dominant giants a tad more seriously.

The EU's Competition Commission, after a three-year investigation, hit Google with a €4.3 billion antitrust fine – $5 billion – the highest fine ever by any antitrust agency anywhere.

No one dominates like Google. According to earlier EU findings cited by Bloomberg , Google's market share exceeds 90% for general Internet search, licensed mobile device operating systems, and app stores for Android software.

"Google has used Android as a vehicle to cement the dominance of its search engine," EU Competition Commissioner Margrethe Vestager told reporters. "These practices have denied rivals the chance to innovate and compete on the merits."

The fine is so large because of Google's "very serious illegal behavior" going back to 2011 and due to the huge revenues Google has earned with this behavior, she said.

In addition, Google was given 90 days to stop its "illegal practices" of forcing cellphone makers that use Google's Android operating system to install Google apps.

This fine comes on top of the €2.4-billion fine the EU hit Google with in 2017 after an investigation into Google's shopping-search service.

And the EU is not through yet. It's investigating Google's online advertising contracts and could issue an additional fine. Online advertising is Google's primary revenues source.

Bloomberg:

The EU said Google ensures that Google Search and Chrome are pre-installed on "practically all Android devices" sold in Europe. Users who find these apps on their phones are likely to stick with them and "do not download competing apps in numbers that can offset the significant commercial advantage derived on pre-installation."

Google's actions reduce the incentives for manufacturers to install and for users to seek out competing apps, it said.

The probe targeted contracts that require Android-phones makers to take Google's search and browser apps and other Google services when they want to license the Play app store, which officials say is a "must-have" for new phones.

The EU also found illegal Google's "significant financial incentives" to telecoms operators and manufacturers that exclusively install Google search on devices. Rivals couldn't compete with these payments, making it difficult for any other search engine to get their app pre-installed. The EU said Google stopped doing this in 2014.

Google's contracts also prevented handset makers selling phones using other versions of Android, the EU said. This hampered manufacturers from making devices using Amazon.com Inc.'s Fire OS Android version, it said.

Regulators rejected arguments that Apple Inc. competes with Android, saying Apple's phone software can't be licensed by handset makers and that Apple phones are often priced outside many Android users' purchasing power. Users face "switching costs" to move from Apple to Android and would continue to face Google Search as a default on Apple devices.

In a long statement on its blog , holier-than-thou Google praises itself from A through Z, in essence portraying itself as the greatest gift to mankind and that therefore, it should be allowed to do as it pleases. It includes this:

Today, because of Android, there are more than 24,000 devices, at every price point, from more than 1,300 different brands, including Dutch, Finnish, French, German, Hungarian, Italian, Latvian, Polish, Romanian, Spanish and Swedish phone makers.

And these devices are running on Android. In other words: Google is everywhere, and its ads and apps are on all these devices. Hence the Competition Commission's point: if you're this dominant, you've got to follow some rules.

At the end of its long statement, Google said: "We intend to appeal." Companies always appeal fines. Google is no exception. And the end product might be much less ambitious.

At the press conference, Vestager said it was up to Google to figure out how to comply with the Commission's order. "The obvious minimum" Google would need to do, she said, is that the "contractual restrictions disappear."

But don't cry for Google. These practices helped it earn it a net profit of $12.7 billion in 2017 and of $19.5 billion in 2016. The decision and a fine of enormous magnitude has been expected. And Google's shares are currently flat for the day.

"This emerging trend highlights just how much risk some investors are willing to take in the current environment." Read As Risks Balloon, Yield Chasers Blow Off the Fed


Raulb , July 19, 2018 at 7:32 am

It's interesting free market advocates are always going on about regulations, the need for free markets and market efficiency but don't seem to care so much about monopolies, outsize profits, the concentration of market power and its abuse that further impedes the operation of free markets and the billionaires that result.

Google's dominance in search and mobile is market failure. Facebook's dominance of social is market failure. Amazon's dominance is market failure, Apple being able to accumulate $800 billion it does not know what to do with is market failure.

Under conventional market theory all these entities would have stiff competition and not be able to accumulate outsize profits or monopoly power so the question is where is the competition and how come the the market is not working? And while the theories continue these firms concentrate even more power, control and windfall profits.

How come free market advocates always seem to be more concerned about attempts to impose minimum wages, health care or proper working conditions on amazon workers for instance than any of this? And we will not even talk about negative externalities like the emergence of a global spyware economy based on surveillance and creepily staking people 24/7. And using seemingly endless 'VC funds' to build these US centric monopolies.

oaf , July 19, 2018 at 8:17 am

We are being stalked; and a virtual individual, more or less fleshed-out, is created in the Cloud for each of us it is based on our behavior, every possible detail of which is incorporated into the dossier. How accurate these representations are can be affected by multiple variables Fake news? How about *Fake Browsing* or *Fake Shopping*. Feel free to experiment!!!

Carolinian , July 19, 2018 at 11:37 am

We are being stalked by allowing ourselves to be stalked. All Android apps carry a "permissions" warning telling how they are planning to stalk you. And of course smartphones themselves are spybots by design–a business model pioneered by Apple, not Google. One could argue that many of the worst current practices of Google are the result of trying to imitate competitors such as Apple and Facebook.

Android is based on open source Linux and there's probably no reason why smartphone manufacturers couldn't get their free operating systems elsewhere. Perhaps one big reason they don't is that they are in on the stalking.

blennylips , July 19, 2018 at 3:48 pm

Back in 2013, a google engineer, Beena Bhatia, took out this patent for google: http://patft.uspto.gov/netacgi/nph-Parser ..blah..blah..blah

I found in a marginalrevolution.com article back then. Turns out MR got it from here: http://www.dailymail.co.uk/sciencetech/article-2515635/Google-files-patent-robot-writes-Facebook-posts-emails-tweets–need-FULL-access-scan-accounts.html

The patent was filed by a Google software engineer on behalf of the firm It describes a system that analyses a user's online posts, emails and texts The system, or bot, would then generate automated replies for future posts These replies would be written in a way that mimics that person's usual language and tone

From the patient:

( 1 of 1 )
United States Patent 8,589,407
Bhatia November 19, 2013
Automated generation of suggestions for personalized reactions in a social network

Abstract

A system and method for automatic generating suggestions for personalized reactions or messages. A suggestion generation module includes a plurality of collector modules, a credentials module, a suggestion analyzer module, a user interface module and a decision tree. The plurality of collector modules are coupled to respective systems to collect information accessible by the user and important to the user from other systems such as e-mail systems, SMS/MMS systems, micro blogging systems, social networks or other systems. The information from these collector modules is provided to the suggestion analyzer module. The suggestion analyzer module cooperates with the user interface module and the decision tree to generate suggested reactions or messages for the user to send. The suggested reactions or messages are presented by the user interface module to the user. The user interface module also displays the original message, other information about the original message such as others' responses, and action buttons for sending, discarding or ignoring the suggested message.

If representations are not accurate, you need to volunteer more info till they get you right.

ST , July 19, 2018 at 8:38 am

"The decision and a fine of enormous magnitude has been expected. And Google's shares are currently flat for the day."

As big a fine as this is that last sentence shows that fines don't work. A monopolist will always pass on fines for it's illegal behaviour to its (captive) consumer/s. The only remedy is for criminal proceedings to be bought against it's senior officers with guaranteed jail time to persuade them to stop. That or breaking up the company.

pretzelattack , July 19, 2018 at 9:35 am

and antitrust law enforcement is a joke in the u.s. but hey, russia russia russia.

Big River Bandido , July 19, 2018 at 11:10 am

One serious project for the left, once it gains power, will be to reverse and destroy the entire line of legal argument that grants personhood to corporations.

Of particular harm are the court decisions on this point in the last 20 years or so, which have brought this concept to its logical extreme. (I'm thinking in particular of the recent gay-wedding-cake case, in which the Court [i.e., Justice Kennedy] implied that corporations have a right to hold, promote, and exercise political opinions, just as if they were a real person with the fiat. The so-called rationale of that decision is far worse in its long-term implications than the immediate outcome of the case.)

nervos belli , July 19, 2018 at 3:10 pm

Even a monopolist cannot simply Ma pass on the fines. Cause if they could have increased prices already since as you write, they are monopoly. Why haven't they done it? Monopolists are not dumb, they already extract the maximum price they think the market can bear.

LarryB , July 19, 2018 at 11:12 am

In the end, the only effect that this is going to have is to transfer money from Google to the EU. Cell phone manufacturers will install Chrome and Google Search whether Google requires it or not. There simply isn't anything else out there that works as well.

Arizona Slim , July 19, 2018 at 11:28 am

Yours Truly has an Android phone. With more than 150 apps, and guess what: I didn't install most of them. They simply came with the phone.

I can recall a recent incident when I needed to call 911 and my phone was off. I turned it on, and, guess what, those 150-plus apps just HAD to update. That process took 15 minutes.

Fortunately, I wasn't in a life-threatening situation. I was only trying to call to report gunfire nearby. In central Tucson, that happens fairly often.

Since the phone was in update mode for 15 minutes before I could even get to the opening screen with the "emergency call" link, I decided not to call 911. It was simply too late to make a timely report.

If I had my druthers, I'd rather have a phone with just a handful of apps. I don't need all of this Google crud. Especially if if poses a risk to health and safety.

albert , July 19, 2018 at 12:50 pm

Why do you put up with 150 apps?

Are you implying that you can't uninstall them?

. .. . .. -- .

ChiGal in Carolina , July 19, 2018 at 2:46 pm

An unlocked phone direct from the mfg instead of the carrier will have fewer apps. Also you can disable many apps, just ignore the "may cause other apps to misbehave " message; it isn't true. Some of the apps you do need, and online forums will list which you need and which you don't.

On my current Android form I have not signed into Chrome and use DDG instead of Google. Pretty much easy as pie Slim, attagirl -- if you can quit FB cold turkey you can reduce your exposure to Google. For example I went back to using a paper calendar.

oh , July 19, 2018 at 2:54 pm

Root your phone and delete all those apps including Google's. Don't use anything google -- gmail, youtube, chrome, google search, google voice, google groups and more of the EVIL company's concoctions created solely to spy on you and sell your data.

Needless to say the crooked cell phone carriers will farm your data and track you.

I'm so sick of these crooked companies, google, facebook, netflix, whatsapp, linkedin and others that snoop on you. Get tutamail or protonmail for your e-mail.

nervos belli , July 19, 2018 at 2:59 pm

Root your phone and delete all those apps including Google's.

This is the wrong way to approach this. The right way ist to install a 3rd party ROM like LineageOS and then not install any gapps.

Be prepared however that only very few programs will work. You will then lack Google play services and they are needed for many many programs. Not much more than what is in f-droid. There is of course no play store whatsoever then.

nervos belli , July 19, 2018 at 3:04 pm

What exact phone model is it?

Arizona Slim , July 19, 2018 at 6:07 pm

It's a Moto G from Motorola.

nervos belli , July 20, 2018 at 10:27 am

For whatever reason my reply didn't go through this morning.PS: this is now the third attempt even. Now replacing all URLs in hope it will go through

I wrote exact model for a reason: there are about two dozen different Moto G versions over 6 years of releases.

Pretty much all of them allow however LineageOS or other third party Android images. Those have no bloatware apps except what comes with the OS itself. If the LineageOS download section has no image for your specific phone, then visit xda-developers forum or needrom which both have even more.

LineageOS is a current Android version and not several years old like with earlier Moto G versions, it gets up to date security patches, has no spyware. You can even install only the Google Apps you want, and can delete or uninstall pretty much anything.
Especially on older phones with limited storage this is a godsend.

Synoia , July 19, 2018 at 11:40 am

I believe that under German law (and I'm not 100% positive of this), executives and directors can become personally liable for the actions of the businesses they manage.

A $5 Billion levied on directors and management, and not shareholders, would appear to be more effective.

Those responsible bear none of the penalty. And, if corporation be people, then is the corporation and its officers conspiring?

ChiGal in Carolina , July 19, 2018 at 2:53 pm

I hope Eric Schmidt pays all $5b out of his pocket and they use it to fund the studies of monopoly impacts he put the kibosh on. Some community service too wouldn't be a bad idea for such a bully.

nervos belli , July 19, 2018 at 3:02 pm

We have the same sort of corporate veil in Germany as all other modern western capitalist countries in form of "Kapitalgesellschaft". A public company is such a company, the other would be the GmbH aka Ltd.

A manager who does criminal things (see Diesel scandal VW/VAG an Audi manager was recently held in custody) can be held liable including fines or jail. But I don't know of any anti-trust actions which pierced the veil.

David Carl Grimes , July 19, 2018 at 12:48 pm

What ever happened to "Don't be evil"

[Jul 16, 2018] The West Is Past

Notable quotes:
"... Two U.S. 'realists', Henry Kissinger and Zbigniew Brzezinski, had always warned that the 'west' must keep China and Russia apart if it wants to keep its leading global position. Nixon went to China to achieve that. ..."
"... Years later the U.S. fell for the myth that it had 'won' the Cold War. It felt invincible, the 'sole superpower' and sought to 'rule them all'. It woke up from that dream after it invaded Iraq. The mighty U.S. military was beaten to pulp by the 'sand niggers' it despised. A few years later U.S. financial markets were in shambles. ..."
"... Crude attempts to further encircle Russia led to the Chinese-Russian alliance that now leads the SCO and soon, one might argue, the world. There will be no photo like the above from the SCO summit. The Chinese President Xi calls Russia's President Putin 'my best friend'. ..."
"... Agreed! But what will the US psychopaths do to maintain their grip when they realize they are really losing it? Nuclear war? ..."
"... Watching the two meetings play out has really been interesting, that the West is dead is not in question. And once it started it seems to be gaining momentum. I don't know how many readers here watch CGTN but it is amazing. My IQ goes up every time I watch. Astonishing how much more valuable information you get from a "heavily censored" Chinese news compared to MSM. The website is a little slow at times but it is well worth the wait. ..."
Jun 10, 2018 | www.moonofalabama.org

G-7 summits are supposed to symbolize "the west", its unity and its power. The summits pretended to set policy directions for the world. We are happy to see that they are dead.

Trump was obviously not inclined to compromise.

Before attending the summit Trump trolled his colleagues by inviting Russia to rejoin the G-7/G-8 format without conditions. Russia had been kicked out after Crimea voted to join its motherland. Merkel, who had negotiated the Minsk agreement with Russia, was furious. She wants to use such an invitation as an element of future negotiations. (It is stupid talk. Russia is not interested in rejoining the G-7/G-8 format.)

There are now many fields where the U.S. and its allies disagree: climate change, the Iran deal, trade are only the major ones.

Before leaving the summit Trump again used Mafia language against everyone else:

As he prepared to depart early from the G-7 summit in Charlevoix, Canada, to head to Singapore ahead of his planned meeting with North Korean leader Kim Jong Un, Trump delivered an ultimatum to foreign leaders, demanding that their countries reduce trade barriers for the U.S. or risk losing market access to the world's largest economy.

"They have no choice. I'll be honest with you, they have no choice," Trump told reporters at a news conference, adding that companies and jobs had left the U.S. to escape trade barriers abroad. "We're going to fix that situation. And if it's not fixed, then we're not going to deal with these countries. "

The row at the G-7 meeting was in stark contrast to the more important other meeting that happened today, the 18th Shanghai Cooperation Organization (SCO) summit in Qingdao, China:

Dazzling against the city skyline of Qingdao, fireworks lit up the faces of guests who traveled across the vast Eurasian continent to the coast of the Yellow Sea for the 18th Shanghai Cooperation Organization (SCO) summit, on Saturday night.

It is the first such summit since the organization's expansion in June 2017 when India and Pakistan joined as full members.

...

The Shanghai Spirit of mutual trust, mutual benefit, equality, consultation, respect for diverse civilizations and pursuit of common development , was stated in the Charter of the SCO, a comprehensive regional organization founded in 2001 by China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan and later expanded to eight member states.

This weekend Xi will chair the summit for the first time as Chinese president, which is attended by leaders of other SCO member states and four observer states, as well as chiefs of various international organizations.

...

The SCO has grown to be an organization covering over 60 percent of the Eurasian landmass, nearly half the world's population and over 20 percent of global GDP.

Two U.S. 'realists', Henry Kissinger and Zbigniew Brzezinski, had always warned that the 'west' must keep China and Russia apart if it wants to keep its leading global position. Nixon went to China to achieve that.

Years later the U.S. fell for the myth that it had 'won' the Cold War. It felt invincible, the 'sole superpower' and sought to 'rule them all'. It woke up from that dream after it invaded Iraq. The mighty U.S. military was beaten to pulp by the 'sand niggers' it despised. A few years later U.S. financial markets were in shambles.

Crude attempts to further encircle Russia led to the Chinese-Russian alliance that now leads the SCO and soon, one might argue, the world. There will be no photo like the above from the SCO summit. The Chinese President Xi calls Russia's President Putin 'my best friend'.

The 'west' has lost in Eurasia.

The U.S. is reduced to a schoolyard bully who beats up his gang members because their former victims have grown too big. Trump is off to Singapore to meet Kim Yong-un. Unlike Trump North Korea's supreme leader will be well prepared. It is likely that he will run rings around Trump during the negotiations. If Trump tries to bully him like he bullies his 'allies', Kim will pack up and leave. Unlike the U.S. 'allies' he has no need to bow to Trump. China and Russia have his back. They are now the powers that can lead the world.

The 'west' is past. The future is in the east.

Posted by b on June 9, 2018 at 03:14 PM | Permalink


Kelli , Jun 9, 2018 3:37:22 PM | 1

Agreed! But what will the US psychopaths do to maintain their grip when they realize they are really losing it? Nuclear war?
Laguerre , Jun 9, 2018 3:44:17 PM | 2
Yeah, I was just thinking that. Trump is running full-speed into isolation. It's an ancient policy, which recalls the 1920s. What does America need of the outside world? Good question.

I would think we will hear in the not too distant future of a European replacement of the US exchange systems, such as VISA. The Americans have become too unreliable. Obviously the Russians and Chinese do have their own systems, but that won't do for the EU.

Independence is going to be forced, and the consequences will be permanent.

Babyl-on , Jun 9, 2018 3:53:27 PM | 5

Watching the two meetings play out has really been interesting, that the West is dead is not in question. And once it started it seems to be gaining momentum. I don't know how many readers here watch CGTN but it is amazing. My IQ goes up every time I watch. Astonishing how much more valuable information you get from a "heavily censored" Chinese news compared to MSM. The website is a little slow at times but it is well worth the wait.

Last year during the border standoff with India they had on strident Indian voices arguing the Indian position every day. Imagine if CNN had on Mexican reps regarding the wall - never happen.

Harry Law , Jun 9, 2018 3:59:37 PM | 6
Because Iran was under sanctions levied by the United Nations earlier, it was blocked from admission as a new member of the Shanghai Cooperation Council [SCO]. The SCO stated that any country under UN sanctions could not be admitted. After the UN sanctions were lifted, Chinese president Xi Jinping announced its support for Iran's full membership in SCO during a state visit to Iran in January 2016.Iran must join the SCO ASAP it is also a military alliance and should prepare itself for a big effort at regime change by the US and lackeys. The moral of the story unless they hang together, the US will hang them separately.
ashley albanese , Jun 9, 2018 4:01:15 PM | 7
Well, China as the text books say was always ' half the human story' - only eclipsed by Western connivance in the 1860's .I remember my father argueing with high ranking Australian government and commercial figures in 1970.

My father argued Australia needed to find its own voice with China and Chinese policy . They replied sneeringly '' Ralph , their just red communists and will never amount to anything ' . Shortly thereafter Nixon flew to Beijing and my father sat back in his living room with a sardonic look on his face !

Scotch Bingeington , Jun 9, 2018 4:05:14 PM | 8
Interesting picture! Judging by his posture, Japan's Prime Minister Abe seems to back Trump's position.

By the way, Mr. Abe doesn't look Japanese to me, he rather has a striking resemblance to a certain Bavarian actor - one Max Griesser .

Laguerre , Jun 9, 2018 4:13:18 PM | 9
You may like Freedland's article yesterday, which unusually I agreed with, that in fact Trump is a poor negotiator, and gives away tricks he doesn't have to. Why no concession from Israel, over the move of the US embassy to Jerusalem? Why give away the honour to NK of a one-to-one with the US president? I'd be surprised if NK surrenders, when they know what will happen if they do.

https://www.theguardian.com/commentisfree/2018/jun/08/trump-master-negotiator-meeting-kim-jong-un-art-of-deal

Madderhatter67 , Jun 9, 2018 4:18:15 PM | 10
They did win the Cold War. That's how they became the'sole superpower'.
Red Ryder , Jun 9, 2018 4:25:57 PM | 11
"President Putin is the leader of a great country who is influential around the world," Xi said. "He is my best, most intimate friend." Xi promised Russia and China would increase their coordination in the international arena.

Putin expressed his thanks for the honor and said he saw it as an "evaluation" of his nation's efforts to strengthen its relationship with its southern neighbor.

"This is an indication of the special attention and respect on which our mutual national interests are based, the interests of our peoples and, of course, our personal friendship," Putin said.

http://www.newsweek.com/putin-my-best-most-intimate-friend-chinese-president-xi-says-967531

This is not going missed by the West.

But it is unstoppable. The range of integrating projects the Chinese and Russians are working on is more than strategic.

They are forcing a massive shift in economics that is impossible for the US and EU to maintain as competitors.

https://sputniknews.com/analysis/201806091065269583-putin-xi-summit-takeaways/

The Double Helix is ascending.

Peter AU 1 , Jun 9, 2018 4:34:45 PM | 12
Interesting that Trump has said Russia should be invited back into the west's G7/G8 at this time. In cold war 1.0, Soviet Union was the main enemy of the US and China was split away from the Soviet Union. In this war, Trump sees China's economy as the main threat to the US and is trying but failing to pull Russia away from China.
Lea , Jun 9, 2018 4:45:07 PM | 13
Posted by: Madderhatter67 | Jun 9, 2018 4:18:15 PM | 10
They did win the Cold War. That's how they became the'sole superpower'.

If winning the Cold War is about vanquishing communism, they flat out lost. Because, while they were concentrating on the end of the USSR and celebrating, China was going up and up and up. They never saw her coming, yet to this day and for the foreseeable future, China is a socialist, Marxist country.

So the new, desperate Western spin is to try to argue that China has "succumbed" to capitalism. Yeah, right, a country where all the private companies have to have members of the CPC on their board and hand over enough shares to the state to grant it veto powers, not to mention the Central bank and all its major companies are state-owned... Lol.

les7 , Jun 9, 2018 4:49:57 PM | 14
"The 'west' is past. The future is in the east."

Wow... such grandiose conclusions...

After the collapse of the USSR the consensus - even of the alt-media (what little of it existed) was that a new American century was on the way and the whole world would be better off for it. A decade later in 2003 the consensus (post 'shock & awe' Gulf War 2) was that America had the ability to re-structure the Asian /African world and that it would all be for good.

15 years later we are all sick of the fruit of that delusion. So we look to another power to save us... Do we understand nothing?

Without the accountability of multi-polarity, Western supreme power all became security-obsessed privilege, self-aggrandizement, blatant plunder and total disregard for moral value and life. Power corrupts - it knows no exceptions.

If the West is truly dead, the East will be no different.

Laguerre , Jun 9, 2018 4:55:53 PM | 15
re 12
Interesting that Trump has said Russia should be invited back into the west's G7/G8 at this time.
Thought of a moment to annoy the Europeans. It is obvious that Trump was pissed off about having to attend, and left at the earliest opportunity. The Europeans heard that, and will draw the inevitable conclusions.
Quentin , Jun 9, 2018 4:57:21 PM | 16
Lea @ 13 Socialist, Marxist, Capitalist, what does it matter: it seems to work for China, at least for the time being. It's success makes me think that a bit more government control of corporations might not be such a bad thing.
Grieved , Jun 9, 2018 5:00:44 PM | 17
The summit with Kim will be fascinating to observe. In my view, NK has finessed the US and the Trump administration to a degree I would not have thought possible, even from native US insiders. To do it long range from the other side of the world speaks to me a lot about the power of Asia, and the clarity of view from there.

I agree with Laguerre @9 that Trump is a terrible negotiator (forgive that I didn't read the Guardian piece). I would take this much further and say that all the US institutions themselves are culturally crippled in terms of understanding what's happening in the ascendancy of Asia. All of their negotiation is feeble, because their grasp on their own true position is based on yesterday's view of their power. You cannot go into negotiation without knowing what you hold.

Every day, I become more confident in the ability of the elder nations to put the young western empires to rest without their being triggered into death spasms.

Red Ryder @11 - I see China's full-on drive for the one Road as its way of waging total war, its strategic masterstroke to render the enemy powerless without the enemy's realizing that it is being attacked. Russia as the other half of the Double Helix mesmerizes the west with weaponry while China undercuts the ground. Both countries are fully at war, and winning, while unseeing commenters complain that it's time for them to "do something." How superb the silk rope drawn so softly around the throat.

It's a beautiful play. I very much hope - and truly expect - that we can all survive to be able to sit back and admire it as the years unfold.

psychohistorian , Jun 9, 2018 5:05:30 PM | 18
I have a small quibble with b's wording but thank him for following and reporting on our evolving world.

b's words:"

The U.S. is reduced to a schoolyard bully who beats up his gang members because their former victims have grown too big.

"

My rewording:

The global elite have their US puppet acting like a schoolyard bully who beat up his gang members because their former victims have grown too big.

The West is trying to consolidate power and control while they still have some ghost of a chance. How they hold countries after this global divorce will be interesting.

At his time the West has little to offer humanistically except its vice grip on most economic interaction and the tools including banking underpinning the "system". The elite have deluded the public in the West for centuries about private finance behind the scenes of all/most conflict......pointing to other religions but never their own.

It sure is getting interesting. IMO, the two Koreas are going to announce a reconciliation that requires the removal of America military forces/bases et al, which fits in with the fake nationalism efforts of Trump.

Jen , Jun 9, 2018 5:09:16 PM | 19
That the US and the EU and their respective camps are at loggerheads over trade and perhaps other economic issues should not (I hope) lead readers to assume that one side has the interests of the public it represents uppermost in mind. As the US and the Anglosphere is dominated by one set of neoliberals, so Germany and the lackey EU nations following Berlin are dominated by another set of neoliberals in thrall to an export-led mercantilist ideology. Just as the elites in charge of US power structures are only interested in enriching themselves, the same can be said for those in charge of power structures in Europe. Whether under the US or the EU, the public suffers.

Notice that Germany benefits from being the major economic power in the EU while its fellow EU nations around the Atlantic and Mediterranean rim flail under a huge debt (and Greece is being punished back into the impoverished colonial status it held under Nazi German occupation) and eastern European EU members are following suit running their economies into the ground and having to beg NATO into setting up bases in their territories to attract money. At the same time German workers are becoming poorer, they are not benefiting from Berlin's economic policies, they are not reproducing fast enough so Berlin needs to bring in more foreign workers in the guise of "refugees" to prop up factories and keep wages low.

@ Madderhatter67: The US did not win the Cold War because the Cold War was only ever a propaganda front for the secret war waged by US / UK elites against Russia and China to dominate and rob these nations and their neighbours of their natural resources.

Grieved , Jun 9, 2018 5:12:25 PM | 20
@5 Babyl-on

Thanks for the nod to CGTN. For any who care, I searched out its YouTube channel and it produces a huge daily output in English:

https://www.youtube.com/user/CCTVNEWSbeijing/videos

I've recently added Vesti News to my news for the same reason, a large daily feed of short clips of the Russian view, in English:

https://www.youtube.com/channel/UCa8MaD6gQscto_Nq1i49iew/videos

I've never been a TV watcher, especially not for news, but I'm enjoying these tastes and flavors of this burgeoning century.

james , Jun 9, 2018 5:20:12 PM | 21
thanks b - and for the laugh with the marjorie and homer pic for comparison!

i think this parallel you draw is a good one.. the west is certainly floundering... i am not sure how global finance responds here... i can't imagine the 1% being on the wrong side of a bet on the direction of things here either..

@6 harry law.. did iran make it into the sco? it sounds like it did.. good!

@14 les7.. regarding your last line - i tend to agree with that viewpoint..

@19 jen... do you think it will be somehow different if the power shifts to russia/china? i guess i am not so sanguine over power, regardless of who holds it.

Wess County , Jun 9, 2018 5:23:01 PM | 22
Very well put, only issue that as to be dealt with is all those Stan Countries, they are a hibernating and breeding ground for Terrorists and Arms dealers , who don't care who they sell arms to and how they get them to rogue regimes.
Zanon , Jun 9, 2018 5:28:02 PM | 23
Its quite funny how Trump wrecked that meeting.

Trump could talk about Russia but who cares, he cant be trusted, hes totally unreliable and hopefully Russia sees that.

Zanon , Jun 9, 2018 5:29:13 PM | 24
at the same time Trump is a king, just look at how the pathetic western states STAND AROUND HIM begging him basically on all kinds of things!
Laguerre , Jun 9, 2018 5:57:10 PM | 25
re Grieved 17
I see China's full-on drive for the one Road as its way of waging total war, its strategic masterstroke to render the enemy powerless without the enemy's realizing that it is being attacked.
I do think you're exaggerating there.

China's past history has been one of a country very contented with itself, much like the US, because defended geographically by vast deserts. A longer history, so some foreigners did traverse the deserts.

The Chinese exported their products by foreign ships (Arabo-Persian) arriving at Canton, and buying cargoes, or camel caravans arriving in the north and buying silk. The Chinese themselves did not travel abroad very much, and so didn't know very much about surrounding countries, or the rest of the world. There was a fleet of Chinese junks which arrived in the Gulf in the 14th century, but it was the only one.

Today's situation is not so different. There are Chinese interventions in Africa, but their diplomacy is pretty ham-fisted. The Belt-and-Road initiative is in fact intended to bring up to speed Central Asian countries like Tajikistan. Fine, Tajikistan needs it, but it's not world-changing.

The rail freight from Beijing to Frankfurt works better as an intermediate between sea and air freight, but essentially it is what has always happened - foreigners export Chinese products. The Chinese don't know how to run a foreign policy.

bjd , Jun 9, 2018 5:58:01 PM | 26
I am surprised nobody here remarked on the pontifically present John Bolton.

This was about Iran, I am pretty sure.

bjd , Jun 9, 2018 6:02:20 PM | 27
I note, by the way, that in the second photo, the two persons holding a paper are not on the same page .

Talk about symbolism.

bjd , Jun 9, 2018 6:07:30 PM | 28
Have a closer look and you'll see that in the first photo, John Bolton is talking (Trump is silent and sitting there like 'Il Duce').

Bolton is talking to Macron, who is looking straight at Bolton.

In the second photo, Merkel is looking at Bolton, who is probably speaking at that moment.

Tell me this is not about Iran.

michaelj72 , Jun 9, 2018 6:26:40 PM | 29
hopehely at @4

"OK, so, is Japan 'east' or 'west'?"

from their body language, I would say that Japan is surely 'with' Trump and the US, but that's only because that arch-reactionary Abe is in power.....and when he goes, and go he will, there will be a big period of adjustment...some day.

Villainesse , Jun 9, 2018 6:26:46 PM | 30
The scambastic Trump could be inclined to make a slightly more fair deal in Singapore just to make a deal, but he is going extra early (no jet lag) and will be controlled by Pompeo with his 'Grim Reaper' CIA-dog/warhawk/translator/born & raised S. Korean with multiple relations in their South KCIA (NIS) and cabinet leadership, Andrew Kim (born Kim Sung-hyun). Kim's purpose will be to control Trump's spontaneaous decision making, inform him on what he reads as N. Korea's intent, and give baseline hawkish color to the translations for his own hawkish viewpoint.
annie , Jun 9, 2018 6:29:13 PM | 31
bjd, bolton is trump's overseer, making sure he doesn't step out of line.

Trump is a poor negotiator, and gives away tricks he doesn't have to. Why no concession from Israel, over the move of the US embassy to Jerusalem?

Laguerre, you have it backwards. the embassy move, the iran deal, and the appointment of bolton are all concessions trump made, as payback for adelson's millions to both the gop and his campaign. possibly also has a little something to do cambridge analytica, honey traps or whatever.

Adelson: the casino mogul driving Trump's Middle East policy

The imprint of the 84-year-old's political passions is seen in an array of Donald Trump's more controversial decisions, including violating the Iran nuclear deal, moving the American embassy in Israel to Jerusalem, and appointing the ultra-hawkish John Bolton as national security adviser.

......The New York Times reported that Adelson is a member of a "shadow National Security Council" advising Bolton

Jen , Jun 9, 2018 6:36:52 PM | 32
James @ 21: I think one should always be a bit suspicious of those who hold power, especially those who find themselves holding the uppermost hand in power as a result of victory in war (whether in the form of actual military combat, trade war or other wars in soft power).

Russia under Vladimir Putin and China under Xi Jinping may be fine but will their successors know not to abuse the power they may gain from the New Silk Road projects encompassing Eurasia and Africa?

hopehely , Jun 9, 2018 6:38:17 PM | 33
Posted by: bjd | Jun 9, 2018 6:02:20 PM | 27
I note, by the way, that in the second photo, the two persons holding a paper are not on the same page.

Talk about symbolism.

In that pic, is that Miller lurking from behind?

Red Ryder , Jun 9, 2018 6:42:03 PM | 34
@29, bjd,

Of course, it is about Iran. It's the Iranian deal that the EU needs to continue. They benefit as the biggest vendors to Iran. They want to get inside that developing 70 million person market, also.

Bolton wants regime change. The EU knows that will be worse than Iraq. And economically, the EU will be in the dumps for 2 decades if there's another war they are forced to join. And they will be forced to join. They cannot say No to the Hegemon.

The EU 2, Germany and France, are at a historic moment of truth.

They could have a great future with Russia, China, Iran, the BRICS, SCO, OBOR and EAEU or they could be crippled by the Empire.

John Gilberts , Jun 9, 2018 7:01:17 PM | 35
Excellent analysis as always. Here's the muck CBC is reporting on the summit.

Canada Rejects Trump's Call to Let Russia Back Into G-7

http://www.cbc.ca/news/politics/trump-russia-g7-canada-1.4697655

"...But Canada, which pushed for Russia to get the boot in 2014, is not onside. 'Russia was invited to be part of this club and I think that was a very wise initiation, and an invitation full of goodwill,'[FM Chrystia Freeland] she told reporters at the summit. 'Russia, however, made clear that it had no interest in behaving according to the rules of Western democracies..."

Glad to hear it...

michaelj72 , Jun 9, 2018 7:15:43 PM | 36
it's kind of wonderful to see all these imperialist and former neo-colonial powers fighting among themselves.

unfortunately, like the old African proverb goes, when the elephants fight it's the grass and small animals that suffer.

I see no reason for optimism for the peoples of europe at this point, as the stranglehold of the Trioka is perhaps as strong as ever, and hundreds of millions of people are suffering; the people simply have to get organized at all levels and take back their sovereignty at least as a start

WorldBLee , Jun 9, 2018 7:17:31 PM | 37
The US still has the power of the dollar in its arsenal. The UK and EU, and any nation that deals with Wall Street, are addicted to US investment in dollars. Since the EU is run by the banks, and western banks can't function with the dollar, any statements by the EU that they're going to avoid US sanctions over Iran are meaningless.

The equation is essentially this: you can have your sovereignty or you can have the benefits of the dollar that make your 1% very rich. You can't have both. Since the EU is ruled by the 1% banker/investor class they will forestall any attempts to regain sovereignty by the people. In a sense, Europe is like Russia 10-15 years ago, thinking that the US is the key to the golden calf. Russia learned the hard way they needed to establish some independence (although to this day Russia doesn't have nearly the financial independence one might hope), and China saw from Russia's example they needed to do so as well. This led them to team up on many economic initiatives while seeking to reduce the dominance of the dollar.

Perhaps someday Europe will learn this lesson. But as long as the EU exists, I kind of doubt it. The EU-crats will cry and criticize Trump but the bankers love US money too much to let them actually do anything serious.

Ghost Ship , Jun 9, 2018 7:20:38 PM | 38
Paul Krugman is tweeting that this is all happening because Trump doesn't understand Value-Added Tax !

This is not an endorsement of Krugman who is trying to blame it on Putin.

rexl , Jun 9, 2018 7:56:05 PM | 39
If the West is dead and the East is the future, then why are so many Chinese buying houses and living part time in Canada, Australia, and the USA? Why is there so much emphasis put on Western education facilities by Asians?
Winston , Jun 9, 2018 8:02:05 PM | 40
I'm sure Trump doesn't understand VAT.

Most Americans don't no matter how much explanation I go into.

They insist its a tariff or duty,which its not.

I've given up trying to explain its a sales tax on all,paying at customs is merely a cash flow issue for the importer.A reclaimable input on his VAT return,did it many times myself.

Sabine , Jun 9, 2018 8:11:53 PM | 41
there is no west nor east.

there is only a bunch of paid of administrators running the countries and the corporations that pay them.

Trumps quid pro quo is deals that benefit his family. I don't thinks he cares one bit about the GOP and how the party fundraises. He cares about advancing his family and keeping the loot.

maybe we should realize that the concepts of east and west, as much as neo liberalism or neo conservatism or any other moniker that we could apply to loot and steal - legally and without shame under the guise of trade - are concepts of the past.

the future is for the strongest, irrespective of their origins or philosophy. we are burning this planet down with a vengeance and we - the people - are to numerous and too expensive to keep.

while we debate and some even chuckle with delight as to how the west is treated by trump, or how much the west deserves to be made redundant and all hail the Russians and the Chinese - the king is dead, long live the king - it is us who dies in the wars, it is our children that are being kidnapped and locked up in prison when arriving on the border seeking asylum, it is us who will watch the women in our live die in childbirth because of lack of medical care, it is us who will die of black lung, hunger, thirst and general malice.

and while we gossip, they laugh all the way to the bank.

NemesisCalling , Jun 9, 2018 8:24:56 PM | 42
b, we have no doubt that the North Korean leadership is ready for the Americans and know the score with a rising Eurasia and a sinking NATO. However, your last assumption of Kim being more than ready to go toe-to-toe with DJT smacks of some of the worst tendencies of many posters here who are ready to venerate Kim without him ever even making formal address of more than a few words to a) his people, 2) his allies, or D) even the world. This is a laughable assumption from you and it would be like having the most beautifully-made garment handy for a long while, desperate for anyone to come along so you could fling it on them to prove they were the most amazing supreme leader in all the world!

This is not to say I do not want the NoKos to succeed in their endeavors of getting a fair deal...hardly: I think they will succeed eventually because they are shrewd. But this is an attempt to squash the unbelievably propagandistic (or naive) attempts to place the mantle of imperviousness, all-knowingness, utterly-innocentness, and insurmountably-cleverousness onto the boy that would be king. DJT could eat a boy like Kim for breakfast if left alone from their advisors.

CE , Jun 9, 2018 8:26:35 PM | 43
Interesting that this happens in June. Because it reminds me of this classic little fun ditty:

Death in June - Death of the West

ben , Jun 9, 2018 8:33:09 PM | 44
Sabine @ 41 said:"there is no west nor east.

"there is only a bunch of paid of administrators running the countries and the corporations that pay them"

And this"and while we gossip, they laugh all the way to the bank."

I would tend to agree, but I'm hoping b's right in his assessment, the empire and her minions very badly need a comeuppance..

dh , Jun 9, 2018 8:45:10 PM | 45
Trump is very dependent on his base. He knows them well. At risk of hitting a discordant note I suspect a lot of his fans are happy seeing him sock it to the goddamn ch*nks and euro faggots.
Daniel , Jun 9, 2018 8:46:57 PM | 46
It's a big weekend. G7, SCO, Bilderberg, NATO Defence Ministers meeting in Brussels and the huge NATO "Drills" including the Baltic States and for the first time, Israel.

Oh, and the US called on NATO to add 30 land battalions, 30 air fighter squadrons, and 30 naval ships to "counter Russian aggression."

The AZW Empire is not giving up its plans.

karlof1 , Jun 9, 2018 8:47:27 PM | 47
I predicted it would become the G6+1 and so it has. Trump told his staffers NOT to sign the Joint Communique, which I believe is a first.

On the issue of power and the BRI , the linked item is a trove of info as it focuses on perhaps the most problematic region of the SCO/BRI.

If Europe is to break free from the Outlaw US Empire, Merkel must be jettisoned and independent-minded leaders must take control of Germany and EU. I'm not at all surprised with how events went in Canada. However, I see the Policy as the Bully, not Trump, the policy still being the attempt to gain Full Spectrum Domination. What's most important, IMO, is this spectacle will not go unnoticed by the rest of the world. The Outlaw US Empire cannot make it any plainer that it's the primary enemy state of all except the Zionist Abomination. I think Abe wonders why he's there and not in Qingdao.

Although this item focuses on Kashmir , it should be read after the longer article linked above. There's little news as of yet coming from Qingdao other than who's cooking what and sideline meets. I expect more coming out beginning Monday. Of course, Kim-Trump begins now, it being the 10th in Singapore already.

bevin , Jun 9, 2018 10:26:24 PM | 48
The difference between the two projects- the western Empire and the Eurasian schemes exemplified by OBOR- is that the former, as 500 years of experience teaches us, relies on ethnic divisions, wars and competition while the latter requires peace and co-operation.

In a sense that answers Jen @ 32. It really doesn't matter who runs the governments of China and Russia, provided that they can prevent the imperialists from distracting them into rivalry. It was that which, thanks to plenty of stupidity on both sides, gave rise to the tensions of which Nixon and Kissinger took advantage.

Had the USSR and China ironed out their small differences on the sixties- and Vietnam gave them a perfect excuse to do so, history would have been very different and probably much less bloody.

The truth is that, as b asserts, the SCO is already much more important than the G7- America and the Six Dwarfs. How much more important is shown by the role of Freeland (the neo-Nazi Ukrainian apologist) in insisting on holding the line against Russia's re-admission to a club that it almost certainly does not want to rejoin.

Trump may not be a 'good negotiator' but he has a position of relative strength vis a vis the rest of the G7 who cannot negotiate because they do as they are told. If they won't do what Trump tells them to do they will be on the lookout for someone else to give them orders-they have no idea of independence or sovereignty. Just watch most of them scuttle back to Brussels for ideas, or set up back channels to Moscow- once a puppet always a puppet.

karlof1 , Jun 9, 2018 11:57:39 PM | 49
The Sino-Soviet Split occurred while Stalin was still alive--he refused to allow the Chinese to develop "Communism with Chinese Characteristics" just like any other European Orientalist. And as the Monthly Review article I linked, the Chinese must beware of becoming/being seen as Imperialistic in their zeal to push BRI--Imperialist behavior will kill the Win-Win concept as it will revert to just another Zero-sum Game.
Hoarsewhisperer , Jun 10, 2018 12:20:55 AM | 50
One of the factors which has been killing the 'Democratic' West is that its bribed & blackmailed leaders have alienated themselves from The People whose views they were elected to represent.

No-one living in a so-called democracy is prepared to tolerate a leader who spends too much time praising, and making excuses for, the crimes of the racist-supremacist Zionist Abomination (h/t karlof1) and its Piece Process in Palestine. It can be persuasively argued that embrace of and fealty to the Z.A. is the only factor which Western Leaders have in common. And it's neither a coincidence nor happenstance.

ben , Jun 10, 2018 12:40:15 AM | 51
Hoarsewhisperer @ 50 said:" Piece Process in Palestine."

Nice word play. I'm assuming the "piece" word is referring to the Israelis taking the Palestinian's lands one piece at a time..

Debsisdead , Jun 10, 2018 12:51:14 AM | 52
Grrr! I still don't get why so many humans believe anything good comes from chucking aside one greedy oppressive arsehole then replacing it with another. Sure the SCO has a founding document laden with flowery words and seemingly wonderful concepts but I say "So what" check out the UN charter or the amerikan constitution and you'll find the same.

These issues of justice & equity cannot be fixed by swapping bosses because every society has its share of pathologically fucked up greedies who have the means and lack of empathy to destroy anything and everyone in their lust for whatever it is they imagine they need.

We have to accept that will never change and that trying to purge the planet of those types just creates more of them from within the structure most successful in effecting the swap.

I know I sound like a scratched disc but the only fix that could hope to work is one that smashes the conglomerations into tiny shards, reducing the world to thousands of small self governing entities; sure some places will still end up being taken over by low self esteem motivated arseholes, but not only will they not be able to do as much damage, arseholes stand out in a small society where more 'normal' humans interact with them - currently all the pr1cks coagulate in spots such as the G7 and few non-pr1cks ever get close enough to see them for what they are. A low count on the old degrees of seperation register makes it much more difficult for the scum to rise. Making sure that no chunk is sufficiently big to force its will on another would also be vital.

That won't fix everything, but who outside some totally screwed up anal regressive would want that anyway? I just want to live in a world where no one cops it like the entire Yemeni population currently is. I see no benefit in moving the horror from Yemen to Uigar-land or whatever place the new bosses decide should be their fun palace of hate, murder and misery.

The Congo and/or Nigeria another coupla sites of misery for money. Timor Leste aka East Timor, now that the Portuguese expats in the form of the man with the Nobel stamp of obeisance to the monied Jose Ramos Horta have done over the locals, something Xanana Gusmão always said could happen. Horta's arseholeness made the wealthiest nation in the world (divide resources by population) riven by poverty, lack of health and education services plus of course old favourite, racist oppression. Check out these kids here untroubled by issues like getting a decent phone signal or their ranking on Twitch - wondering where their next decent feed is coming from is prolly their most pressing issue.

Swapping SCO for G7 will do SFA for them or anyone else unlucky enough to be living on top of whatever the current 'must have' is deemed to be.

Anyone who imagines that it could is delusional.

karlof1 , Jun 10, 2018 12:55:44 AM | 53
Official SCO Conference site .

Humanity either learns how to live with itself on an equal basis or it will perish; it's really that simple. The likes of the Outlaw US Empire, its NATO vassals and the Zionist Abomination are shining examples of what MUST be exorcised for ever more.

[Jun 24, 2018] Was the Marketplace of Ideas Politically Hijacked -

Notable quotes:
"... A Stigler Center panel examines the influence of Big Five tech firms over political discourse and the marketplace of ideas. ..."
"... "Our country has allowed the concentration of power in giant intermediaries -- Google, Facebook, and Amazon -- vastly more powerful than the original intermediary which we fought, which was the British East India Company." ..."
"... "We have reporters, editors, and publishers of our newspapers who live in fear every day. This is true of the people who publish our books and who write our books. They live in fear [that] Amazon is going to shut them down. Whose fault is that? It's the people in the antitrust community." ..."
"... "Google not only vanquished competition. What it did is it vanquished the antitrust enforcers who are supposed to protect the process of competition." ..."
"... "Basically, Section 230 was a libertarian's dream. They got what they wanted. I am a limited government conservative. What they wanted was a no-government world." ..."
Jun 24, 2018 | promarket.org

Was the Marketplace of Ideas "Politically Hijacked"? Posted on June 21, 2018 by Asher Schechter

A Stigler Center panel examines the influence of Big Five tech firms over political discourse and the marketplace of ideas.

https://www.youtube.com/embed/c0E15ka446M

At one point during Mark Zuckerberg's Senate hearing in April , the Facebook CEO had the following peculiar exchange with Senator Lindsay Graham (R-SC):

Graham: But you, as a company, welcome regulation?

Zuckerberg: I think, if it's the right regulation, then yes.

Graham: You think the Europeans had it right?

Zuckerberg: I think that they get things right.

Graham: . So would you work with us in terms of what regulations you think are necessary in your industry?

Zuckerberg: Absolutely.

Graham: Okay. Would you submit to us some proposed regulations?

Zuckerberg: Yes. And I'll have my team follow up with you so, that way, we can have this discussion across the different categories where I think that this discussion needs to happen.

Graham: Look forward to it.

This telling bit of dialogue was part of an overall pattern: the hearing was meant to hold Facebook (and Zuckerberg himself, as the company's founder, CEO, and de facto single ruler ) accountable for the mishandling of millions of people's private data. Yet one after another , the senators were asking an evasive Zuckerberg if he would be willing to endorse their bills and proposals to regulate Facebook. This mode of questioning repeated itself (to a somewhat lesser extent) during the House's tougher questioning of Zuckerberg the following day.

Needless to say, most company CEOs grilled by Congress following a major scandal that impacts millions of people and possibly the very nature of American democracy are not usually treated in this way -- as private regulators almost on equal footing with Congress.

Facebook, however, is not a typical company. As a recent Vox piece noted, with its vast reach of more than two billion users worldwide, Facebook is more akin to a government or a "powerful sovereign," with Zuckerberg -- due to his unusual level of control over it -- being the "key lawgiver." Zuckerberg acknowledged as much himself when he said, in a much-quoted moment of candor , that "in a lot of ways Facebook is more like a government than a traditional company." More than other technology companies, he added, Facebook is "really setting policies."

The notion that corporations can become so powerful that they are able to act as a "form of private government" (to quote Zephyr Teachout ) has long been part of the antitrust literature. Indeed, as the Open Market Institute's Barry Lynn and Matt Stoller recently noted during a panel at the Stigler Center's Digital Platforms and Concentration antitrust conference, it is deeply rooted in the rich tradition of antimonopoly in America.

That digital platforms are major political players has also been well documented . Once disdainful of politics, in the past two years Google, Facebook, and Amazon have dramatically ramped up their lobbying efforts, as the public and media backlash against their social, economic, and political power intensified. Google, which enjoyed unprecedented access to the Obama White House, is now the biggest lobbyist in Washington, with other tech platforms not far behind.

Market power begetting political power is not new in itself. As the participants of the Stigler panel noted, it is the immense power that concentrated digital intermediaries like Google and Facebook wield over digital markets, human interaction and the marketplace of ideas, particularly when it comes to the distribution of political information, that presents a unique challenge. As Lina Khan (also of Open Markets) recently noted , the current landscape of Internet media is one in which a handful of companies "are basically acting as private regulators, as private governments, over the dissemination and organization of information in a way that is totally unchecked by the public."

The latter part, at least, seems to be changing rapidly, as Americans (and millions more worldwide) grapple with ongoing revelations showing the profound impact that digital monopolies have on political opinions and outcomes, in the US and across the world. As Congressman John Sarbanes (D-MD) said during Zuckerberg's House hearing in April: "Facebook is becoming a self-regulated superstructure for political discourse."

Left to right: Scott Cleland, Ellen Goodman, Matt Stoller, Barry Lynn, Guy Rolnik

The exact nature of tech platforms' political power, its roots, and how to best deal with it -- all questions debated during the Stigler Center panel -- are complex and varied. But the key question seems rather simple. As Sarbanes put it during the same Congressional hearing: "Are we, the people, going to regulate our political dialogue, or are you, Mark Zuckerberg, going to end up regulating the political discourse? ״

A Private Regulator of Speech

Facebook, said Rutgers Law School professor Ellen Goodman, operates as a private speech regulator. As such, much like public governments, it "privileges some [forms of] speech over others." Unlike governments, however, which as regulators of speech purport to support public good, Facebook has adopted a "First Amendment-like radical libertarianism" through which it has so far refused to differentiate between "high- and low-quality information, truth or falsity, responsible and irresponsible press."

Facebook, famously, argues that it is not a media company, but a technology company. "It's not a player, it's not a [referee], it's just the engineer who made the field," said Goodman, the co-director of the Rutgers Institute for Information Policy & Law. The purpose of Facebook's "First Amendment rhetoric," she noted, is "to maximize data flow on its platform," but by doing so, "it implies, or even says explicitly, that it's standing in the shoes of the government."

Facebook and other platforms, said Goodman, have benefited from the process of deregulation and budget cuts to public media -- a process that has predated the Internet, and led to Washington essentially "giving up" on media policy. The government effectively "exempted these platforms from the kind of ordinary regulation that other information intermediaries were subjected to." With "platforms in the shoes of government, [and] government out of media policy," the concentration of platform power over information flows was allowed to continue undisturbed.

The problem, however, is that much like fellow FAANGs Amazon and Google, Facebook is not just an impartial governor, but a market participant interested in "monopolizing the time of its users," with a strong incentive to privilege its own products and business model that "eviscerates journalism."

"It also tunes its algorithm to favor certain kinds of speech and certain speakers," added Goodman. "There's almost no transparency, save for what it selectively, elliptically, and sometimes misleadingly posts on its blog."

"People Live in Fear"

In a seminal 1979 essay on what he termed the "political content" of antitrust, former FTC chairman Robert Pitofsky argued that "political values," such as "the fear that excessive concentration of economic power will foster anti-democratic political pressures," should be incorporated into antitrust enforcement. In recent years, this view has been echoed by a growing number of antitrust scholars , who argue that the way antitrust enforcement has been conducted in the US for the past 40 years -- solely through the prism of "consumer welfare" -- is ill equipped to deal with the new threats posed by digital platforms.

The Unites States, remarked Lynn during the panel, was born "out of rebellion against concentrated power, the British East India Company." The original purpose of antimonopoly in America, said Lynn, was the protection of personal liberty from concentrated economic and political power: "to give everybody the ability to manage their own property in the ways that they see fit, manage their own lives in the way that they see fit. To be truly independent of everybody else. To not be anybody else's puppet." Liberty and democracy, he added, "are functions of antimonopoly."

A state in which Facebook and Google wield enormous influence over the flow of information -- where, to quote a recent piece by Wired 's Nicholas Thompson and Fred Vogelstein, "every publisher knows that, at best, they are sharecroppers on Facebook's massive industrial farm" -- is antithetical to this ethos, said Lynn, and is firmly rooted in the "absolute, complete failure" of antitrust in the United States. "Our country has allowed the concentration of power in giant intermediaries -- Google, Facebook, and Amazon -- vastly more powerful than the original intermediary which we fought, which was the British East India Company." These digital intermediaries, he added, are "using their power in ways that are directly threatening our most fundamental liberties and our democracy."

"Our country has allowed the concentration of power in giant intermediaries -- Google, Facebook, and Amazon -- vastly more powerful than the original intermediary which we fought, which was the British East India Company."

The blame for the outsize influence that Facebook and other digital platforms have over the political discourse, said Lynn, rests squarely on the shoulders of the antitrust community: "For 200 years in this country, antimonopoly was designed to create freedom from masters. In 1981, when we got rid of our traditional antimonopoly and replaced it with consumer welfare, we created a system that has given freedom to master."

In today's concentrated media landscape, he contended, "people live in fear. We have reporters, editors, and publishers of our newspapers who live in fear every day. This is true of the people who publish our books and who write our books. They live in fear [that] Amazon is going to shut them down. Whose fault is that? It's the people in the antitrust community."

"We have reporters, editors, and publishers of our newspapers who live in fear every day. This is true of the people who publish our books and who write our books. They live in fear [that] Amazon is going to shut them down. Whose fault is that? It's the people in the antitrust community."

Lynn went on to quote from Thompson and Vogelstein's Wired piece: "The social network is roughly 200 times more valuable than the Times . And journalists know that the man who owns the farm has the leverage. If Facebook wanted to, it could quietly turn any number of dials that would harm a publisher -- by manipulating its traffic, its ad network, or its readers."

"This was hidden in the middle of the article," said Lynn. "[Thompson], as a journalist, felt obliged to put this out there He was crying out to the people in this community, in the antitrust community. He's saying 'protect me, the publisher, the editor of this magazine. Protect me, the reporter. Please make sure that I have the independence to do my work.'"

The "Code of Silence" Has Been Broken

Recent changes to Facebook's newsfeed have caused referral traffic from Facebook to media companies' websites to sharply decline , once again raising concerns about the significant impact that the company has on the media industry. The satirical news site The Onion , for instance, has launched a public war against Facebook, calling it "an unwanted interloper between The Onion and our audience." "We have 6,572,949 followers on Facebook who receive an ever-decreasing amount of the content we publish on the network," the site's editor-in-chief, Chad Nackers, told Business Insider .

The backlash by major news outlets and politicians across the political spectrum against the power of Facebook and other tech platforms as de facto regulators of speech on the Internet is a new phenomenon, said Guy Rolnik, a Clinical Associate Professor for Strategic Management at the University of Chicago Booth school of Business, during the panel. Until not too long ago, he said, Internet monopolies were the "darlings of the news media." Less than a year ago , he noted, Zuckerberg was even touted by several media outlets as a viable presidential candidate. "The idea that a person who has unprecedented private control over personal data and the public discourse at large would also be the president of the United States was totally in the realm and perimeter of what is legitimate," he said.

What has changed? "In many ways, what has changed is that many people associate Facebook today with the election of Donald Trump. This is why we see so much focus on those issues that were very salient and important for years," Rolnik maintained. Trump's election, and Facebook's role in the lead-up to it, broke the "code of silence."

Nevertheless, newsrooms today, he said, still do everything in their power "to make sure that everything is shareable on Facebook." In the words of Thompson and Vogelstein, they are still "sharecroppers on Facebook's massive industrial farm."

Google has "Politically Hijacked the US Antitrust Enforcement Process"

Scott Cleland, president of the consultancy firm Precursor LLC and former deputy US coordinator for international communications and information policy in the George HW Bush administration, has long warned that concentration among digital platforms will negatively impact the US economy and society at large.

In 2007, Cleland testified before the Senate on the then-proposed Google-DoubleClick merger, calling upon antitrust enforcers to block the merger and warning that lax antitrust enforcement (of the kind that ultimately led the Google-DoubleClick merger to be approved) would allow Google to become the "ultimate Internet gatekeeper" and the "online-advertising bottleneck provider picking content winners and losers" -- both of which came true. In 2011, he published the book Search & Destroy: Why You Can't Trust Google Inc . , in which he warned readers of Google's surveillance-based business model and its "unprecedented centralization of power over the world's information."

During the conference, Cleland presented a new white paper entitled " Rejecting the Google School of No-Antitrust: Fake Consumer Welfare Standard " in which he argues that Alphabet/Google has "politically hijacked the US antitrust enforcement process from 2013 to 2018."

US antitrust enforcers, he said, were initially "very tough" on Google during the first years of the George W. Bush administration. Between 2008 and 2012, both the Bush II and Obama administrations brought "strong and consistent antitrust scrutiny and enforcement to Google." Then, in 2013, the Federal Trade Commission decided to drop its case against the company, despite the conclusion of its staff that Google had used anticompetitive tactics. Following Obama's reelection, which Google at the time was credited with delivering, antitrust enforcement against Big Tech firms essentially ceased. "They shut down all those investigations and they did nothing for the last five years. DOJ went from very active -- four or five major antitrust actions -- to nothing. Crickets."

Back then, Google and Facebook were still "fiercely competing," he said. Google was going after Facebook's territory with Google Plus, and Facebook countered by going after Google search with Yahoo and Bing. But then, in 2014, something happened: the large tech firms "mysteriously stopped competing."

"Yahoo returned to working with Google. Apple dropped Bing for Siri and moved to Google search. Apple and Microsoft dropped their patent suits, and then Microsoft and Google made peace after scratching each other's eyes out. Google went from 70 percent share of search and search advertising in the PC market to 95 percent of that in both of those markets today," said Cleland.

What happened? Cleland points to the what he calls the "Google School of No-Antitrust," a narrative with which according to him Google had been trying to "influence public opinion, the media, elected and government officials, and US and state antitrust enforcers, to make the public believe Google (and other Internet platforms) have no antitrust risk or liability, because they offer free innovative products and services, and to make conservatives believe that the Google School of No-Antitrust and the Chicago School's consumer welfare standard and application are the same, when they are not."

Google, he asserted, "not only vanquished competition. What it did is it vanquished the antitrust enforcers who are supposed to protect the process of competition." It did so, he argued, by "politically hijacking the most important market, which is information."

"Google not only vanquished competition. What it did is it vanquished the antitrust enforcers who are supposed to protect the process of competition."

Cleland, who identifies as a free market conservative, argued that the current Internet is far from a free market. "Who thinks it's a good idea that all of the world's information goes through one bottleneck?" he asked, adding that "all the bad things that you're seeing right now are the result of policy."

One such policy is Section 230 of the Communications Decency Act of 1996, which provided Internet companies with legal immunity for the content their users generated or shared and is often credited with enabling the creation of the Internet as we know it today. Cleland sees Section 230 as "market structuring" and has compared it to the libertarian concept of creating artificial islands outside any governmental territory, known as " seasteading ."

"Section 230 says -- I'm paraphrasing, but that's what it says -- that US policy recognizes that the Internet is a free market that should be unfettered by federal and state regulations," said Cleland. "Basically, Section 230 was a libertarian's dream. They got what they wanted. I am a limited government conservative. What they wanted was a no-government world."

"Basically, Section 230 was a libertarian's dream. They got what they wanted. I am a limited government conservative. What they wanted was a no-government world."

Much of today's problems regarding the conduct of digital platforms, he said, results from this policy. "Twenty-two years ago, we as a nation immunized all interactive computer services from any civil liability. We said, 'It is OK. There is no accountability, no responsibility for you looking the other way, when your platform or things that are going on on your platform harm others.'"

Section 230, he maintained, "basically created 21 st -century robber barons. Those guys know they have the full weight of the government. If they go to court, they're going to win, and they have almost all the time."

Antitrust Is "One Part of the Answer"

When it comes to addressing these threats to free speech and democratic discourse, said Goodman, antitrust is only "one part of the answer." The other part, she asserted, is regulation.

"The First Amendment that we have, that we know and love today," she said, "was not born in 1789 in Philadelphia. It developed in the latter part of the 20th century against a particular set of industrial and social practices that mitigated some of the costs of free speech and spread the benefits."

Lawmakers and policymakers, she argued, should "retrieve and resuscitate the vocabulary of media policy," focusing on three core values: "freedom of mind and autonomy; non-market values of diversity and localism/community; and a concept of the public interest and fiduciary responsibility."

Whenever someone makes an argument for using antitrust or regulation as a way to structure markets of information, Stoller cautioned, there are those who will argue that this amounts to censorship. When asked how to avoid censorship when discussing the use government power over speech, Goodman was conflicted: "There is no way around that. There's a real tension here between absolute liberty of speech and controls on speech," she said. We cannot have this whole conference with us fantasizing about various regulatory possibilities that involve use restrictions -- limits on the flow of data, limits on the collection of data -- without acknowledging that under our First Amendment doctrine right now, probably none of that passes muster."

However, Goodman pointed to the Northwest Ordinance as a possible roadmap. "Nobody would say, or maybe they did, that [the Northwest Ordinance ] was an anti-private property rule. It was structuring the market so that more people could own property. That's what the history of media regulation in this country has been: structuring speech markets so that more people can speak."

Disclaimer: The ProMarket blog is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Blog Policy .

[Jun 13, 2018] Predatory Gambling in the USA

Notable quotes:
"... Corporate Crime Reporter ..."
"... [For the complete q/a format Interview with Les Bernal, see 32 Corporate Crime Reporter 24(11), June 7, 2018, print edition only .] ..."
Jun 13, 2018 | www.counterpunch.org

June 13, 2018 Predatory Gambling in the USA by Russell Mokhiber Les Bernal is working on a ranking of the states with the worst predatory gambling problems.

He hasn't completed it yet. But he gave us a sneak preview. Bernal is the national director of the public interest group Stop Predatory Gambling.

If he were to call it right now, which would be the five worst states?

Oregon, West Virginia, New Jersey, Illinois, Pennsylvania.

What about Nevada?

"We don't debate Nevada," Bernal told Corporate Crime Reporter in an interview last week. "If you were going to have one place to gamble, have it be Nevada. I always exclude Nevada."

What are the best five?

Utah, Hawaii, Alaska, Nebraska – with New Hampshire and Vermont tied for the number five slot.

"It's hard to do a ranking," Bernal said. "Oregon has one tribal casino. But the Oregon lottery has video gambling machines. Technically they don't have many casinos in Oregon. But Oregon is as bad as any state in the country in terms of harming the public."

"West Virginia is there as one of the worst. Oregon is right there. It's not a uniform thing."

"Our goal is to have a ranking of the biggest predatory gambling states in the country. And factor in the different forms of gambling they have."

How would you describe the politics behind the movement to stop predatory gambling?

"We are one of the most politically diverse movements in the United States. We have people from all political stripes who work together. You would be hard pressed to find a more diverse network of citizens involved with this."

Is your group opposed to all gambling?

"We are opposed to the role of government in actively promoting and sanctioning commercialized gambling to citizens."

Isn't that all gambling?

"If you and I went bowling or were playing golf and we had a friendly wager on the game, that is technically gambling. I'm not talking about prohibiting that. We are talking about gambling for profit."

You would prohibit gambling for profit?

"We would prohibit running a gambling ring for profit, yes we would."

If you prohibited gambling for profit, you are prohibiting 99 percent of the gambling in the United States, right?

"Running it as a business."

Isn't that 99 percent of gambling in the United States?

"No. There are all sorts of social gambling where people have Friday night poker gamers, office Super Bowl pools."

What percentage of all gambling in the United States is gambling for profit?

"In 2016, the American people lost $117 billion to government sanctioned gambling."

How much did they lose in other gambling?

"The numbers on illegal gambling don't compare."

The legalized gambling piece is $117 billion in 2016.

"That's what they lost. What they wagered is close to $200 billion."

And illegal gambling is much less?

"Well, if you and I are in a Friday night poker game, that's gambling."

How about bookies?

"Those guys are doing it for profit. That's called illegal commercial gambling."

How big is that market?

"The American Gaming Association make up a number of $150 billion on illegal sports gambling."

Give us your argument against government sanctioned gambling.

"The American people lost $117 billion to government sanctioned gambling in 2016. At the same time one out of two citizens in this country own zero net assets – no stocks, no property, no bonds."

"Here you have an enormous number of people who lack assets to grow into the middle class. And the public voice of government is targeting that same constituency to play games that are rigged against them."

"We start with this moral belief that all men and women deserve a fair opportunity to have the best life possible for themselves and their family. That's why we show up every day to compete on this."

"You have citizens losing $117 billion a year. And meanwhile, half the citizens don't have any assets at all. The public voice of government to most citizens today no matter where you live is gambling."

"We see a lottery class of citizens. You don't have a chance to improve your life. You are stuck with a lack of mobility out of poverty. And your best hope is to try and play a rigged game to make some cash to pay your rent every month."

"At the same time, government is advertising these games relentlessly to citizens. We spend more than $1 billion a year advertising gambling to the American people on lotteries alone. That pales in comparison to any other form of government advertising."

"When I was a kid growing up I used to see advertisements with John Wayne saying – invest in your country – buy US Savings Bonds. The idea behind that was to encourage citizens to build assets. Everyone points back to the 1950s where there was a growing middle class and a chance for people to climb out of poverty."

"We had a high savings rate. People were building assets. That was an understated part of keeping people in the middle class. We talk a lot about wages, but wages are only one part of the equation. You also have to encourage people to build assets."

"We come off the great depression during World War II. And the public voice of government then was – we have to put people to work. Imagine government encouraging people back then to go out and spend their money on lottery tickets to raise the money for the war. Instead they encouraged the citizens to go out and buys savings bonds, to invest in your country, invest in your neighbor. It created this strong sense of a common good. It was stronger then than it is today."

Of the $117 billion that the American people lost, how much of that came from poor people?

"Without question, a large portion is coming from the poor. David Just and his team at Cornell have done the best research on that. And it consistently shows that the people who are participating come from the least favored sections of our society. And they are playing out of financial desperation. It's a Hail Mary investment strategy."

"Two-thirds of the public doesn't gamble at all. You have one third of the public participating in this government sanctioned gambling. The messaging that is targeting those folks is – this is a chance to change your life. They sell scratch tickets that say – money for life. This is going to be your answer to get ahead in society."

"The average person sees the lottery as Powerball and Megamillions. But the truth is that those two games represent only a small portion of lottery revenues. Where lotteries make most of their cash are on what are called scratch tickets. Scratch tickets are the number one money maker, unless you are a state like Oregon that has these electronic gambling machines, which are the most lucrative of all."

"Scratch tickets are these high frequency games where you play many times a day at higher and higher wagered amounts."

What impact does gambling have on the poor?

"Government sanctioned gambling goes to the heart of many issues that the poor face. It's a big factor in the lack of mobility out of poverty. By encouraging people to gamble on these rigged games, instead of being able to build a savings account, they are spending on these rigged games at the street corner on a daily basis."

"What are the key elements of mobility out of poverty? Family structure. If you can keep a family unit together, you have a better shot of getting out of poverty than if you don't. Two of the biggest factors shown to disrupt family structure are infidelity and financial problems."

"Here you have a government program that directly attacks the family structure and the family structure is the key to pulling people out of poverty. Government sanctioned gambling is designed to get citizens to lose their cash as frequently as possible at higher wagered amounts. It directly intersects with rising inequality. We define it as a lack of opportunity."

[For the complete q/a format Interview with Les Bernal, see 32 Corporate Crime Reporter 24(11), June 7, 2018, print edition only .]

[Jun 06, 2018] The magic of Neoliberalism is to transform acts that should be illegal into legal ones

Jun 06, 2018 | discussion.theguardian.com

Alpo88 -> DesignConstruct , 3 Jun 2018 17:20

A "legal system of tax evasion", written like that, in quotes, is obviously a metaphor with an intended sarcasm. Clearly, logically, if a taxation system is legal, by using it you are not "evading" taxes, which is an illegal act.... Anyway, everybody seems to have understood my intention but you. Well, now you also know.

The magic of Neoliberalism is to transform acts that should be illegal into legal ones. In fact they do so explicitly as their argument for reducing taxation is exactly that of getting rid or decreasing the problem of illegal tax evasion.... so they say. Their problem is that we have no evidence that tax evasion decreases under Neoliberalism on top of the legal tax minimisation already provided. The only thing that happens under Neoliberalism is that the Tax Office tends to be under-resourced and everybody likes to conveniently look somewhere else.

DesignConstruct -> Alpo88 , 3 Jun 2018 16:52
A "legal system of tax evasion" is a non sequitur, what they have done is create a set of tax laws that enable more opportunities for tax avoidance by the well off, and Kerry very correctly took advantage of it. If you can, get a copy of the Senate hearing - it's gold.
Splatgadget -> NME765 , 3 Jun 2018 16:51
Agreed, but I'll raise you Kleptocracy.

[Dec 04, 2017] The neoliberal framework in antitrust is based on pecifically its pegging competition to consumer welfare, defined as short-term price effects and as such s unequipped to capture the architecture of market power in the modern economy

Notable quotes:
"... This Note argues that the current framework in antitrust-specifically its pegging competition to "consumer welfare," defined as short-term price effects-is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon's dominance if we measure competition primarily through price and output. ..."
"... This Note maps out facets of Amazon's dominance. Doing so enables us to make sense of its business strategy, illuminates anticompetitive aspects of Amazon's structure and conduct, and underscores deficiencies in current doctrine. The Note closes by considering two potential regimes for addressing Amazon's power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties. ..."
Feb 12, 2017 | economistsview.typepad.com
anne : February 11, 2017 at 11:43 AM , 2017 at 11:43 AM
http://www.yalelawjournal.org/article/amazons-antitrust-paradox

January, 2017

Amazon's Antitrust Paradox
By Lina M. Khan

Abstract

Amazon is the titan of twenty-first century commerce. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space. Although Amazon has clocked staggering growth, it generates meager profits, choosing to price below-cost and expand widely instead. Through this strategy, the company has positioned itself at the center of e-commerce and now serves as essential infrastructure for a host of other businesses that depend upon it. Elements of the firm's structure and conduct pose anticompetitive concerns -- yet it has escaped antitrust scrutiny.

This Note argues that the current framework in antitrust-specifically its pegging competition to "consumer welfare," defined as short-term price effects-is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon's dominance if we measure competition primarily through price and output.

Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational-even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.

This Note maps out facets of Amazon's dominance. Doing so enables us to make sense of its business strategy, illuminates anticompetitive aspects of Amazon's structure and conduct, and underscores deficiencies in current doctrine. The Note closes by considering two potential regimes for addressing Amazon's power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties.

[Dec 03, 2017] How Criminals Built Capitalism by Clive Crook

That explains why after dissolution of the USSR organized crime reached such level: this is standard capitalism development scenario.
Notable quotes:
"... In fact, the evolution of the modern economy owes more than you might think to these outlaws. That's the theme of " Forging Capitalism: Rogues, Swindlers, Frauds, and the Rise of Modern Finance " by Ian Klaus. It's a history of financial crimes in the 19th and early 20th centuries that traces a recurring sequence: new markets, new ways to cheat, new ways to transact and secure trust. As Klaus says, criminals helped build modern capitalism. ..."
"... Cochrane, in a way, was convicted of conduct unbecoming a man of his position. Playing the markets, let alone cheating, was something a man of his status wasn't supposed to do. Trust resided in social standing. ..."
"... The stories are absorbing and the larger theme is important: "Forging Capitalism" is a fine book and I recommend it. But I have a couple of criticisms. The project presumably began as an academic dissertation, and especially at the start, before Klaus starts telling the stories, the academic gravity is crushing. ..."
"... Nonetheless, Klaus is right: Give the markets' ubiquitous and ingenious criminals their due. They helped build modern capitalism, and they aren't going away. Just ask Bernie Madoff. ..."
Apr 05, 2015 | Bloomberg View

Whenever buyers and sellers get together, opportunities to fleece the other guy arise. The history of markets is, in part, the history of lying, cheating and stealing -- and of the effort down the years to fight commercial crime.

In fact, the evolution of the modern economy owes more than you might think to these outlaws. That's the theme of "Forging Capitalism: Rogues, Swindlers, Frauds, and the Rise of Modern Finance" by Ian Klaus. It's a history of financial crimes in the 19th and early 20th centuries that traces a recurring sequence: new markets, new ways to cheat, new ways to transact and secure trust. As Klaus says, criminals helped build modern capitalism.

And what a cast of characters. Thomas Cochrane is my own favorite. (This is partly because he was the model for Jack Aubrey in Patrick O'Brian's "Master and Commander" novels, which I've been reading and rereading for decades. Presumably Klaus isn't a fan: He doesn't note the connection.)

Cochrane was an aristocrat and naval hero. At the height of his fame in 1814 he was put on trial for fraud. An associate had spread false rumors of Napoleon's death, driving up the price of British government debt, and allowing Cochrane to avoid heavy losses on his investments. Cochrane complained (with good reason, in fact) that the trial was rigged, but he was found guilty and sent to prison.

The story is fascinating in its own right, and the book points to its larger meaning. Cochrane, in a way, was convicted of conduct unbecoming a man of his position. Playing the markets, let alone cheating, was something a man of his status wasn't supposed to do. Trust resided in social standing.

As the turbulent century went on, capitalism moved its frontier outward in every sense: It found new opportunities overseas; financial innovation accelerated; and buyers and sellers were ever more likely to be strangers, operating at a distance through intermediaries. These new kinds of transaction required new ways of securing trust. Social status diminished as a guarantee of good faith. In its place came, first, reputation (based on an established record of honest dealing) then verification (based on public and private records that vouched for the parties' honesty).

Successive scams and scandals pushed this evolution of trust along. Gregor MacGregor and the mythical South American colony of Poyais ("the quintessential fraud of Britain's first modern investment bubble," Klaus calls it); Beaumont Smith and an exchequer bill forging operation of remarkable scope and duration; Walter Watts, insurance clerk, theatrical entrepreneur and fraudster; Harry Marks, journalist, newspaper proprietor and puffer of worthless stocks. On and on, these notorious figures altered the way the public thought about commercial trust, and spurred the changes that enabled the public to keep on trusting nonetheless.

The stories are absorbing and the larger theme is important: "Forging Capitalism" is a fine book and I recommend it. But I have a couple of criticisms. The project presumably began as an academic dissertation, and especially at the start, before Klaus starts telling the stories, the academic gravity is crushing.

Trust, to be simple with our definition, is an expectation of behavior built upon norms and cultural habits. It is often dependent upon a shared set of ethics or values. It is also a process orchestrated through communities and institutions. In this sense, it is a cultural event and thus a historical phenomenon.

No doubt, but after a first paragraph like that you aren't expecting a page-turner. Trust me, it gets better. When he applies himself, Klaus can write. Describing the messenger who brought the false news of Napoleon's death, he says:

Removed from the dark of the street, the man could be seen by the light of two candles. He looked, a witness would later testify, "like a stranger of some importance." A German sealskin cap, festooned with gold fringes, covered his head. A gray coat covered his red uniform, upon which hung a star Neighbors and residents of the inn stirred and peered in as the visitor penned a note.

Tell me more.

My other objection is to the book's repeated suggestion that Adam Smith and other classical proponents of market economics naively underestimated the human propensity to deceive and over-credited the market's ability to promote good behavior. Klaus doesn't examine their claims at length or directly, but often says things such as:

The sociability in which Adam Smith had placed his hopes for harnessing self-interest was not a sufficient safeguard in the sometimes criminal capitalism of the ruthless free market.

Of course it wasn't. Smith didn't believe that the market's civilizing tendencies, together with humans' instinct for cooperation, were a sufficient safeguard against fraud or breach of contract or other commercial wrongs. He was nothing if not realistic about human nature. And by the way, many of the subtle adaptations to the shifting risk of fraud that Klaus describes were private undertakings, not government measures. Far from being surprised by them, Smith would have expected their development.

Nonetheless, Klaus is right: Give the markets' ubiquitous and ingenious criminals their due. They helped build modern capitalism, and they aren't going away. Just ask Bernie Madoff.

To contact the author on this story: Clive Crook at ccrook5@bloomberg.net

[Dec 01, 2017] Elite needs a kill switch for their front men and women

Notable quotes:
"... Today when we consider the major countries of the world we see that in many cases the official leaders are also the leaders in actuality: Vladimir Putin calls the shots in Russia, Xi Jinping and his top Politburo colleagues do the same in China, and so forth. However, in America and in some other Western countries, this seems to be less and less the case, with top national figures merely being attractive front-men selected for their popular appeal and their political malleability, a development that may eventually have dire consequences for the nations they lead. As an extreme example, a drunken Boris Yeltsin freely allowed the looting of Russia's entire national wealth by the handful of oligarchs who pulled his strings, and the result was the total impoverishment of the Russian people and a demographic collapse almost unprecedented in modern peacetime history. ..."
"... An obvious problem with installing puppet rulers is the risk that they will attempt to cut their strings, much like Putin soon outmaneuvered and exiled his oligarch patron Boris Berezovsky. ..."
"... One means of minimizing such risk is to select puppets who are so deeply compromised that they can never break free, knowing that the political self-destruct charges buried deep within their pasts could easily be triggered if they sought independence. I have sometimes joked with my friends that perhaps the best career move for an ambitious young politician would be to secretly commit some monstrous crime and then make sure that the hard evidence of his guilt ended up in the hands of certain powerful people, thereby assuring his rapid political rise. ..."
"... The gist is that elite need a kill switch on their front men (and women). ..."
"... McCain's father connected with the infamous Board of Inquiry which cleared Israel in that state's attack on USS LIBERTY during Israel's seizure of the Golan Heights. ..."
"... Another stunning article in which the author makes reference to his recent acquisition of what he considers to be a reliably authentic audio file of POW McCain's broadcasts from captivity. Dynamite stuff. ..."
"... Also remarkable; fantastic. It's hard to believe, and a testament to the boldness of Washington dog-and-pony shows, because this must have been well-known in insider circles in Washington – anything so damning which was not ruthlessly and professionally suppressed and simply never allowed to become part of a national discussion would surely have been stumbled upon before now. Land of the Cover-Up. ..."
marknesop.wordpress.com
Patient Observer, July 23, 2016 at 7:07 pm
An interesting article on John McCain. I disagree with the contention that McCain hid knowledge that many American POWs were left behind (undoubtedly some voluntarily choose to remain behind but not hundreds ). However, the article touched on some ideas that rang true:

Today when we consider the major countries of the world we see that in many cases the official leaders are also the leaders in actuality: Vladimir Putin calls the shots in Russia, Xi Jinping and his top Politburo colleagues do the same in China, and so forth. However, in America and in some other Western countries, this seems to be less and less the case, with top national figures merely being attractive front-men selected for their popular appeal and their political malleability, a development that may eventually have dire consequences for the nations they lead. As an extreme example, a drunken Boris Yeltsin freely allowed the looting of Russia's entire national wealth by the handful of oligarchs who pulled his strings, and the result was the total impoverishment of the Russian people and a demographic collapse almost unprecedented in modern peacetime history.

An obvious problem with installing puppet rulers is the risk that they will attempt to cut their strings, much like Putin soon outmaneuvered and exiled his oligarch patron Boris Berezovsky.

One means of minimizing such risk is to select puppets who are so deeply compromised that they can never break free, knowing that the political self-destruct charges buried deep within their pasts could easily be triggered if they sought independence. I have sometimes joked with my friends that perhaps the best career move for an ambitious young politician would be to secretly commit some monstrous crime and then make sure that the hard evidence of his guilt ended up in the hands of certain powerful people, thereby assuring his rapid political rise.

The gist is that elite need a kill switch on their front men (and women).

http://www.unz.com/runz/american-pravda-when-tokyo-rose-ran-for-president/

Cortes , July 24, 2016 at 11:16 am

Seems to be a series of pieces dealing with Vietnam POWs: the following linked item was interesting and provided a plausible explanation: that the US failed to pay up agreed on reparations

http://www.unz.com/runz/american-pravda-relying-upon-maoist-professors-of-cultural-studies/

marknesop , July 24, 2016 at 12:29 pm
Remarkable and shocking. Wheels within wheels – this is the first time I have ever seen McCain's father connected with the infamous Board of Inquiry which cleared Israel in that state's attack on USS LIBERTY during Israel's seizure of the Golan Heights.
Cortes , July 25, 2016 at 9:08 am
Another stunning article in which the author makes reference to his recent acquisition of what he considers to be a reliably authentic audio file of POW McCain's broadcasts from captivity. Dynamite stuff. The conclusion regarding aspiring untenured historians is quite downbeat:

http://www.unz.com/runz/american-pravda-will-there-be-a-spotlight-sequel-to-the-killing-fields/

marknesop , July 25, 2016 at 10:40 am
Also remarkable; fantastic. It's hard to believe, and a testament to the boldness of Washington dog-and-pony shows, because this must have been well-known in insider circles in Washington – anything so damning which was not ruthlessly and professionally suppressed and simply never allowed to become part of a national discussion would surely have been stumbled upon before now. Land of the Cover-Up.

yalensis , July 25, 2016 at 3:40 pm

So, McCain was Hanoi Jack broadcasting from the Hanoi Hilton?

[Oct 23, 2017] Neoliberalism as Creative Destruction David Harvey, 2007

This article is 10 year old but the analysis presented still remain by-and-large current.
You can read full article in Neoliberalism As Creative Destruction - David Harvey by Open Critique - issue
Notable quotes:
"... Neoliberalism is a theory of political economic practices proposing that human well-being can best be advanced by the maximization of entrepreneurial freedoms within an institutional framework characterized by private property rights, individual liberty, unencumbered markets, and free trade. ..."
"... Furthermore, if markets do not exist (in areas such as education, health care, social security, or environmental pollution), then they must be created, by state action if necessary. ..."
"... State interventions in markets (once created) must be kept to a bare minimum because the state cannot possibly possess enough information to second-guess market signals (prices) and because powerful interests will inevitably distort and bias state interventions (particularly in democracies) for their own benefit. ..."
"... State after state, from the new ones that emerged from the collapse of the Soviet Union to old-style social democracies and welfare states such as New Zealand and Sweden, have embraced, sometimes voluntarily and sometimes in response to coercive pressures, some version of neoliberal theory and adjusted at least some of their policies and practices accordingly. Post apartheid South Africa quickly adopted the neoliberal frame and even contemporary China appears to be headed in that direction. Furthermore, advocates of the neoliberal mindset now occupy positions of considerable influence in education (universities and many "think tanks"), in the media, in corporate board rooms and financial institutions, in key state institutions (treasury departments, central banks), and also in those international institutions such as the International Monetary Fund (IMF) and the World Trade Organization (WTO) that regulate global finance and commerce. Neoliberalism has, in short, become hegemonic as a mode of discourse and has pervasive effects on ways of thought and political-economic practices to the point where it has become incorporated into the commonsense way we interpret, live in, and understand the world. ..."
"... Neoliberalization has in effect swept across the world like a vast tidal wave of institutional reform and discursive adjustment. While plenty of evidence shows its uneven geographical development, no place can claim total immunity (with the exception of a few states such as North Korea). Furthermore, the rules of engagement now established through the WTO (governing international trade) and by the IMF (governing international finance) instantiate neoliberalism as a global set of rules. All states that sign on to the WTO and the IMF (and who can afford not to?) agree to abide (albeit with a "grace period" to permit smooth adjustment) by these rules or face severe penalties. ..."
"... For any system of thought to become dominant, it requires the articulation of fundamental concepts that become so deeply embedded in commonsense understandings that they are taken for granted and beyond question. For this to occur, not any old concepts will do. A conceptual apparatus has to be constructed that appeals almost naturally to our intuitions and instincts, to our values and our desires, as well as to the possibilities that seem to inhere in the social world we inhabit. The founding figures of neoliberal thought took political ideals of individual liberty and freedom as sacrosanct -- as the central values of civilization. And in so doing they chose wisely and well, for these are indeed compelling and greatly appealing concepts. Such values were threatened, they argued, not only by fascism, dictatorships, and communism, but also by all forms of state intervention that substituted collective judgments for those of individuals set free to choose. They then concluded that without "the diffused power and initiative associated with (private property and the competitive market) it is difficult to imagine a society in which freedom may be effectively preserved." 1 ..."
"... The U.S. answer was spelled out on September 19, 2003, when Paul Bremer, head of the Coalition Provisional Authority, promulgated four orders that included "the full privatization of public enterprises, full ownership rights by foreign firms of Iraqi U.S. businesses, full repatriation of foreign profits . . . the opening of Iraq's banks to foreign control, national treatment for foreign companies and . . . the elimination of nearly all trade barriers." 4 The orders were to apply to all areas of the economy, including public services, the media, manufacturing, services, transportation, finance, and construction. Only oil was exempt. A regressive tax system favored by conservatives called a flat tax was also instituted. The right to strike was outlawed and unions banned in key sectors. An Iraqi member of the Coalition Provisional Authority protested the forced imposition of "free market fundamentalism," describing it as "a flawed logic that ignores history." 5 Yet the interim Iraqi government appointed at the end of June 2004 was accorded no power to change or write new laws -- it could only confirm the decrees already promulgated. ..."
"... The redistributive tactics of neoliberalism are wide-ranging, sophisticated, frequently masked by ideological gambits, but devastating for the dignity and social well-being of vulnerable populations and territories. The wave of creative destruction neoliberalization has visited across the globe is unparalleled in the history of capitalism. Understandably, it has spawned resistance and a search for viable alternatives. ..."
Oct 23, 2017 | journals.sagepub.com

Neoliberalism has become a hegemonic discourse with pervasive effects on ways of thought and political-economic practices to the point where it is now part of the commonsense way we interpret, live in, and understand the world. How did neoliberalism achieve such an exalted status, and what does it stand for? In this article, the author contends that neoliberalism is above all a project to restore class dominance to sectors that saw their fortunes threatened by the ascent of social democratic endeavors in the aftermath of the Second World War. Although neoliberalism has had limited effectiveness as an engine for economic growth, it has succeeded in channeling wealth from subordinate classes to dominant ones and from poorer to richer countries. This process has entailed the dismantling of institutions and narratives that promoted more egalitarian distributive measures in the preceding era.

Neoliberalism is a theory of political economic practices proposing that human well-being can best be advanced by the maximization of entrepreneurial freedoms within an institutional framework characterized by private property rights, individual liberty, unencumbered markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices. The state has to be concerned, for example, with the quality and integrity of money. It must also set up military, defense, police, and juridical functions required to secure private property rights and to support freely functioning markets. Furthermore, if markets do not exist (in areas such as education, health care, social security, or environmental pollution), then they must be created, by state action if necessary. But beyond these tasks the state should not venture. State interventions in markets (once created) must be kept to a bare minimum because the state cannot possibly possess enough information to second-guess market signals (prices) and because powerful interests will inevitably distort and bias state interventions (particularly in democracies) for their own benefit.

For a variety of reasons, the actual practices of neoliberalism frequently diverge from this template. Nevertheless, there has everywhere been an emphatic turn, ostensibly led by the Thatcher/Reagan revolutions in Britain and the United States, in political-economic practices and thinking since the 1970s. State after state, from the new ones that emerged from the collapse of the Soviet Union to old-style social democracies and welfare states such as New Zealand and Sweden, have embraced, sometimes voluntarily and sometimes in response to coercive pressures, some version of neoliberal theory and adjusted at least some of their policies and practices accordingly. Post apartheid South Africa quickly adopted the neoliberal frame and even contemporary China appears to be headed in that direction. Furthermore, advocates of the neoliberal mindset now occupy positions of considerable influence in education (universities and many "think tanks"), in the media, in corporate board rooms and financial institutions, in key state institutions (treasury departments, central banks), and also in those international institutions such as the International Monetary Fund (IMF) and the World Trade Organization (WTO) that regulate global finance and commerce. Neoliberalism has, in short, become hegemonic as a mode of discourse and has pervasive effects on ways of thought and political-economic practices to the point where it has become incorporated into the commonsense way we interpret, live in, and understand the world.

Neoliberalization has in effect swept across the world like a vast tidal wave of institutional reform and discursive adjustment. While plenty of evidence shows its uneven geographical development, no place can claim total immunity (with the exception of a few states such as North Korea). Furthermore, the rules of engagement now established through the WTO (governing international trade) and by the IMF (governing international finance) instantiate neoliberalism as a global set of rules. All states that sign on to the WTO and the IMF (and who can afford not to?) agree to abide (albeit with a "grace period" to permit smooth adjustment) by these rules or face severe penalties.

The creation of this neoliberal system has entailed much destruction, not only of prior institutional frameworks and powers (such as the supposed prior state sovereignty over political-economic affairs) but also of divisions of labor, social relations, welfare provisions, technological mixes, ways of life, attachments to the land, habits of the heart, ways of thought, and the like. Some assessment of the positives and negatives of this neoliberal revolution is called for. In what follows, therefore, I will sketch in some preliminary arguments as to how to both understand and evaluate this transformation in the way global capitalism is working. This requires that we come to terms with the underlying forces, interests, and agents that have propelled the neoliberal revolution forward with such relentless intensity. To turn the neoliberal rhetoric against itself, we may reasonably ask, In whose particular interests is it that the state take a neoliberal stance and in what ways have those interests used neoliberalism to benefit themselves rather than, as is claimed, everyone, everywhere?

In whose particular interests is it that the state take a neoliberal stance, and in what ways have those interests used neoliberalism to benefit themselves rather than, as is claimed, everyone, everywhere?

The "Naturalization" of Neoliberalism

For any system of thought to become dominant, it requires the articulation of fundamental concepts that become so deeply embedded in commonsense understandings that they are taken for granted and beyond question. For this to occur, not any old concepts will do. A conceptual apparatus has to be constructed that appeals almost naturally to our intuitions and instincts, to our values and our desires, as well as to the possibilities that seem to inhere in the social world we inhabit. The founding figures of neoliberal thought took political ideals of individual liberty and freedom as sacrosanct -- as the central values of civilization. And in so doing they chose wisely and well, for these are indeed compelling and greatly appealing concepts. Such values were threatened, they argued, not only by fascism, dictatorships, and communism, but also by all forms of state intervention that substituted collective judgments for those of individuals set free to choose. They then concluded that without "the diffused power and initiative associated with (private property and the competitive market) it is difficult to imagine a society in which freedom may be effectively preserved." 1

Setting aside the question of whether the final part of the argument necessarily follows from the first, there can be no doubt that the concepts of individual liberty and freedom are powerful in their own right, even beyond those terrains where the liberal tradition has had a strong historical presence. Such ideals empowered the dissident movements in Eastern Europe and the Soviet Union before the end of the cold war as well as the students in Tiananmen Square. The student movement that swept the world in 1968 -- from Paris and Chicago to Bangkok and Mexico City -- was in part animated by the quest for greater freedoms of speech and individual choice. These ideals have proven again and again to be a mighty historical force for change.

It is not surprising, therefore, that appeals to freedom and liberty surround the United States rhetorically at every turn and populate all manner of contemporary political manifestos. This has been particularly true of the United States in recent years. On the first anniversary of the attacks now known as 9/11, President Bush wrote an op-ed piece for the New York Times that extracted ideas from a U.S. National Defense Strategy document issued shortly thereafter. "A peaceful world of growing freedom," he wrote, even as his cabinet geared up to go to war with Iraq, "serves American long-term interests, reflects enduring American ideals and unites Americas allies." "Humanity," he concluded, "holds in its hands the opportunity to offer freedom s triumph over all its age-old foes," and "the United States welcomes its responsibilities to lead in this great mission." Even more emphatically, he later proclaimed that "freedom is the Almighty's gift to every man and woman in this world" and "as the greatest power on earth [the United States has] an obligation to help the spread of freedom." 2

So when all of the other reasons for engaging in a preemptive war against Iraq were proven fallacious or at least wanting, the Bush administration increasingly appealed to the idea that the freedom conferred upon Iraq was in and of itself an adequate justification for the war. But what sort of freedom was envisaged here, since, as the cultural critic Matthew Arnold long ago thoughtfully observed, "Freedom is a very good horse to ride, but to ride somewhere." 3 To what destination, then, were the Iraqi people expected to ride the horse of freedom so selflessly conferred to them by force of arms?

The U.S. answer was spelled out on September 19, 2003, when Paul Bremer, head of the Coalition Provisional Authority, promulgated four orders that included "the full privatization of public enterprises, full ownership rights by foreign firms of Iraqi U.S. businesses, full repatriation of foreign profits . . . the opening of Iraq's banks to foreign control, national treatment for foreign companies and . . . the elimination of nearly all trade barriers." 4 The orders were to apply to all areas of the economy, including public services, the media, manufacturing, services, transportation, finance, and construction. Only oil was exempt. A regressive tax system favored by conservatives called a flat tax was also instituted. The right to strike was outlawed and unions banned in key sectors. An Iraqi member of the Coalition Provisional Authority protested the forced imposition of "free market fundamentalism," describing it as "a flawed logic that ignores history." 5 Yet the interim Iraqi government appointed at the end of June 2004 was accorded no power to change or write new laws -- it could only confirm the decrees already promulgated.

What the United States evidently sought to impose upon Iraq was a full-fledged neoliberal state apparatus whose fundamental mission was and is to facilitate conditions for profitable capital accumulation for all comers, Iraqis and foreigners alike. The Iraqis were, in short, expected to ride their horse of freedom straight into the corral of neoliberalism. According to neoliberal theory, Bremers decrees are both necessary and sufficient for the creation of wealth and therefore for the improved well-being of the Iraqi people. They are the proper foundation for an adequate rule of law, individual liberty, and democratic governance. The insurrection that followed can in part be interpreted as Iraqi resistance to being driven into the embrace of free market fundamentalism against their own will

It is useful to recall, however, that the first great experiment with neoliberal state formation was Chile after Augusto Pinochet s coup almost thirty years to the day before Bremers decrees were issued, on the "little September 11th" of 1973. The coup, against the democratically elected and leftist social democratic government of Salvador Allende, was strongly backed by the CIA and supported by U.S. Secretary of State Henry Kissinger. It violently repressed all left-of-center social movements and political organizations and dismantled all forms of popular organization, such as community health centers in poorer neighborhoods. The labor market was "freed" from regulatory or institutional restraints -- trade union power, for example. But by 1973, the policies of import substitution that had formerly dominated in Latin American attempts at economic regeneration, and that had succeeded to some degree in Brazil after the military coup of 1964, had fallen into disrepute. With the world economy in the midst of a serious recession, something new was plainly called for. A group of U.S. economists known as "the Chicago boys," because of their attachment to the neoliberal theories of Milton Friedman, then teaching at the University of Chicago, were summoned to help reconstruct the Chilean economy. They did so along free-market lines, privatizing public assets, opening up natural resources to private exploitation, and facilitating foreign direct investment and free trade. The right of foreign companies to repatriate profits from their Chilean operations was guaranteed. Export-led growth was favored over import substitution. The subsequent revival of the Chilean economy in terms of growth, capital accumulation, and high rates of return on foreign investments provided evidence upon which the subsequent turn to more open neoliberal policies in both Britain (under Thatcher) and the United States (under Reagan) could be modeled. Not for the first time, a brutal experiment in creative destruction carried out in the periphery became a model for the formulation of policies in the center. 6

The fact that two such obviously similar restructurings of the state apparatus occurred at such different times in quite different parts of the world under the coercive influence of the United States might be taken as indicative that the grim reach of U.S. imperial power might lie behind the rapid proliferation of neoliberal state forms throughout the world from the mid-1970s onward. But U.S. power and recklessness do not constitute the whole story. It was not the United States, after all, that forced Margaret Thatcher to take the neoliberal path in 1979. And during the early 1980s, Thatcher was a far more consistent advocate of neoliberalism than Reagan ever proved to be. Nor was it the United States that forced China in 1978 to follow the path that has over time brought it closer and closer to the embrace of neoliberalism. It would be hard to attribute the moves toward neoliberalism in India and Sweden in 1992 to the imperial reach of the United States. The uneven geographical development of neoliberalism on the world stage has been a very complex process entailing multiple determinations and not a little chaos and confusion. So why, then, did the neoliberal turn occur, and what were the forces compelling it onward to the point where it has now become a hegemonic system within global capitalism?

Why the Neoliberal Turn?

Toward the end of the 1960s, global capitalism was falling into disarray. A significant recession occurred in early 1973 -- the first since the great slump of the 1930s. The oil embargo and oil price hike that followed later that year in the wake of the Arab-Israeli war exacerbated critical problems. The embedded capitalism of the postwar period, with its heavy emphasis on an uneasy compact between capital and labor brokered by an interventionist state that paid great attention to the social (i.e., welfare programs) and individual wage, was no longer working. The Bretton Woods accord set up to regulate international trade and finance was finally abandoned in favor of floating exchange rates in 1973. That system had delivered high rates of growth in the advanced capitalist countries and generated some spillover benefits -- most obviously to Japan but also unevenly across South America and to some other countries of South East Asia -- during the "golden age" of capitalism in the 1950s and early 1960s. By the next decade, however, the preexisting arrangements were exhausted and a new alternative was urgently needed to restart the process of capital accumulation. 7 How and why neoliberalism emerged victorious as an answer to that quandary is a complex story. In retrospect, it may seem as if neoliberalism had been inevitable, but at the time no one really knew or understood with any certainty what kind of response would work and how.

The world stumbled toward neoliberalism through a series of gyrations and chaotic motions that eventually converged on the so-called 'Washington Consensus" in the 1990s. The uneven geographical development of neoliberalism, and its partial and lopsided application from one country to another, testifies to its tentative character and the complex ways in which political forces, historical traditions, and existing institutional arrangements all shaped why and how the process actually occurred on the ground.

There is, however, one element within this transition that deserves concerted attention. The crisis of capital accumulation of the 1970s affected everyone through the combination of rising unemployment and accelerating inflation. Discontent was widespread, and the conjoining of labor and urban social movements throughout much of the advanced capitalist world augured a socialist alternative to the social compromise between capital and labor that had grounded capital accumulation so successfully in the postwar period. Communist and socialist parties were gaining ground across much of Europe, and even in the United States popular forces were agitating for widespread reforms and state interventions in everything ranging from environmental protection to occupational safety and health and consumer protection from corporate malfeasance. There was. in this, a clear political threat to ruling classes everywhere, both in advanced capitalist countries, like Italy and France, and in many developing countries, like Mexico and Argentina.

Beyond political changes, the economic threat to the position of ruling classes was now becoming palpable. One condition of the postwar settlement in almost all countries was to restrain the economic power of the upper classes and for labor to be accorded a much larger share of the economic pie. In the United States, for example, the share of the national income taken by the top 1 percent of earners fell from a prewar high of 16 percent to less than 8 percent by the end of the Second World War and stayed close to that level for nearly three decades. While growth was strong such restraints seemed not to matter, but when growth collapsed in the 1970s, even as real interest rates went negative and dividends and profits shrunk, ruling classes felt threatened. They had to move decisively if they were to protect their power from political and economic annihilation.

The coup d'état in Chile and the military takeover in Argentina, both fomented and led internally by ruling elites with U.S. support, provided one kind of solution. But the Chilean experiment with neoliberalism demonstrated that the benefits of revived capital accumulation were highly skewed. The country and its ruling elites along with foreign investors did well enough while the people in general fared poorly. This has been such a persistent effect of neoliberal policies over time as to be regarded a structural component of the whole project. Dumenil and Levy have gone so far as to argue that neoliberalism was from the very beginning an endeavor to restore class power to the richest strata in the population. They showed how from the mid-1980s onwards, the share of the top 1 percent of income earners in the United States soared rapidly to reach 15 percent by the end of the century. Other data show that the top 0.1 percent of income earners increased their share of the national income from 2 percent in 1978 to more than 6 percent by 1999. Yet another measure shows that the ratio of the median compensation of workers to the salaries of chief executive officers increased from just over thirty to one in 1970 to more than four hundred to one by 2000. Almost certainly, with the Bush administrations tax cuts now taking effect, the concentration of income and of wealth in the upper echelons of society is continuing apace. 8

And the United States is not alone in this: the top 1 percent of income earners in Britain doubled their share of the national income from 6.5 percent to 13 percent over the past twenty years. When we look further afield, we see extraordinary concentrations of wealth and power within a small oligarchy after the application of neoliberal shock therapy in Russia and a staggering surge in income inequalities and wealth in China as it adopts neoliberal practices. While there are exceptions to this trend -- several East and Southeast Asian countries have contained income inequalities within modest bounds, as have France and the Scandinavian countries -- the evidence suggests that the neoliberal turn is in some way and to some degree associated with attempts to restore or reconstruct upper-class power.

We can, therefore, examine the history of neoliberalism either as a utopian project providing a theoretical template for the reorganization of international capitalism or as a political scheme aimed at reestablishing the conditions for capital accumulation and the restoration of class power. In what follows, I shall argue that the last of these objectives has dominated. Neoliberalism has not proven effective at revitalizing global capital accumulation, but it has succeeded in restoring class power. As a consequence, the theoretical utopianism of the neoliberal argument has worked more as a system of justification and legitimization. The principles of neoliberalism are quickly abandoned whenever they conflict with this class project.

Neoliberalism has not proven effective at revitalizing global capital accumulation, but it has succeeded in restoring class power.

Toward the Restoration of Class Power

If there were movements to restore class power within global capitalism, then how were they enacted and by whom? The answer to that question in countries such as Chile and Argentina was simple: a swift, brutal, and self-assured military coup backed by the upper classes and the subsequent fierce repression of all solidarities created within the labor and urban social movements that had so threatened their power. Elsewhere, as in Britain and Mexico in 1976, it took the gentle prodding of a not yet fiercely neoliberal International Monetary Fund to push countries toward practices -- although by no means policy commitment -- to cut back on social expenditures and welfare programs to reestablish fiscal probity. In Britain, of course, Margaret Thatcher later took up the neoliberal cudgel with a vengeance in 1979 and wielded it to great effect, even though she never fully overcame opposition within her own party and could never effectively challenge such centerpieces of the welfare state as the National Health Service. Interestingly, it was only in 2004 that the Labour Government dared to introduce a fee structure into higher education. The process of neoliberalization has been halting, geographically uneven, and heavily influenced by class structures and other social forces moving for or against its central propositions within particular state formations and even within particular sectors, for example, health or education. 9

It is informative to look more closely at how the process unfolded in the United States, since this case was pivotal as an influence on other and more recent transformations. Various threads of power intertwined to create a transition that culminated in the mid-1990s with the takeover of Congress by the Republican Party. That feat represented in fact a neoliberal "Contract with America" as a program for domestic action. Before that dramatic denouement, however, many steps were taken, each building upon and reinforcing the other.

To begin with, by 1970 or so, there was a growing sense among the U.S. upper classes that the anti-business and anti-imperialist climate that had emerged toward the end of the 1960s had gone too far. In a celebrated memo, Lewis Powell (about to be elevated to the Supreme Court by Richard Nixon) urged the American Chamber of Commerce in 1971 to mount a collective campaign to demonstrate that what was good for business was good for America. Shortly thereafter, a shadowy but influential Business Round Table was formed that still exists and plays a significant strategic role in Republican Party politics. Corporate political action committees, legalized under the post-Watergate campaign finance laws of 1974, proliferated like wildfire. With their activities protected under the First Amendment as a form of free speech in a 1976 Supreme Court decision, the systematic capture of the Republican Party as a class instrument of collective (rather than particular or individual) corporate and financial power began. But the Republican Party needed a popular base, and that proved more problematic to achieve. The incorporation of leaders of the Christian right, depicted as a moral majority, together with the Business Round Table provided the solution to that problem. A large segment of a disaffected, insecure, and largely white working class was persuaded to vote consistently against its own material interests on cultural (anti-liberal, anti-Black, antifeminist and antigay), nationalist and religious grounds. By the mid-1990s, the Republican Party had lost almost all of its liberal elements and become a homogeneous right-wing machine connecting the financial resources of large corporate capital with a populist base, the Moral Majority, that was particularly strong in the U.S. South. 10

The second element in the U.S. transition concerned fiscal discipline. The recession of 1973 to 1975 diminished tax revenues at all levels at a time of rising demand for social expenditures. Deficits emerged everywhere as a key problem. Something had to be done about the fiscal crisis of the state; the restoration of monetary discipline was essential. That conviction empowered financial institutions that controlled the lines of credit to government. In 1975, they refused to roll over New York's debt and forced that city to the edge of bankruptcy. A powerful cabal of bankers joined together with the state to tighten control over the city. This meant curbing the aspirations of municipal unions, layoffs in public employment, wage freezes, cutbacks in social provision (education, public health, and transport services), and the imposition of user fees (tuition was introduced in the CUNY university system for the first time). The bailout entailed the construction of new institutions that had first rights to city tax revenues in order to pay off bond holders: whatever was left went into the city budget for essential services. The final indignity was a requirement that municipal unions invest their pension funds in city bonds. This ensured that unions moderate their demands to avoid the danger of losing their pension funds through city bankruptcy.

Such actions amounted to a coup d'état by financial institutions against the democratically elected government of New York City, and they were every bit as effective as the military overtaking that had earlier occurred in Chile. Much of the city's social infrastructure was destroyed, and the physical foundations (e.g., the transit system) deteriorated markedly for lack of investment or even maintenance. The management of New York's fiscal crisis paved the way for neoliberal practices both domestically under Ronald Reagan and internationally through the International Monetary Fund throughout the 1980s. It established a principle that, in the event of a conflict between the integrity of financial institutions and bondholders on one hand and the well-being of the citizens on the other, the former would be given preference. It hammered home the view that the role of government was to create a good business climate rather than look to the needs and well-being of the population at large. Fiscal redistributions to benefit the upper classes resulted in the midst of a general fiscal crisis.

Whether all the agents involved in producing this compromise in New York understood it at the time as a tactic for the restoration of upper-class power is an open question. The need to maintain fiscal discipline is a matter of deep concern in its own right and does not have to lead to the restitution of class dominance. It is unlikely, therefore, that Felix Rohatyn, the key merchant banker who brokered the deal between the city, the state, and the financial institutions, had the reinstatement of class power in mind. But this objective probably was very much in the thoughts of the investment bankers. It was almost certainly the aim of then-Secretary of the Treasury William Simon who, having watched the progress of events in Chile with approval, refused to give aid to New York and openly stated that he wanted that city to suffer so badly that no other city in the nation would ever dare take on similar social obligations again. 11

The third element in the U.S. transition entailed an ideological assault upon the media and upon educational institutions. Independent "think tanks" financed by wealthy individuals and corporate donors proliferated -- the Heritage Foundation in the lead -- to prepare an ideological onslaught aimed at persuading the public of the commonsense character of neoliberal propositions. A flood of policy papers and proposals and a veritable army of well-paid hired lieutenants trained to promote neoliberal ideas coupled with the corporate acquisition of media channels effectively transformed the discursive climate in the United States by the mid-1980s. The project to "get government off the backs of the people" and to shrink government to the point where it could be "drowned in a bathtub" was loudly proclaimed. With respect to this, the promoters of the new gospel found a ready audience in that wing of the 1968 movement whose goal was greater individual liberty and freedom from state power and the manipulations of monopoly capital. The libertarian argument for neoliberalism proved a powerful force for change. To the degree that capitalism reorganized to both open a space for individual entrepreneurship and switch its efforts to satisfy innumerable niche markets, particularly those defined by sexual liberation, that were spawned out of an increasingly individualized consumerism, so it could match words with deeds.

This carrot of individualized entrepreneurship and consumerism was backed by the big stick wielded by the state and financial institutions against that other wing of the 1968 movement whose members had sought social justice through collective negotiation and social solidarities. Reagan's destruction of the air traffic controllers (PATCO) in 1980 and Margaret Thatchers defeat of the British miners in 1984 were crucial moments in the global turn toward neoliberalism. The assault upon institutions, such as trade unions and welfare rights organizations, that sought to protect and further working-class interests was as broad as it was deep. The savage cutbacks in social expenditures and the welfare state, and the passing of all responsibility for their well-being to individuals and their families proceeded apace. But these practices did not and could not stop at national borders. After 1980, the United States, now firmly committed to neoliberalization and clearly backed by Britain, sought, through a mix of leadership, persuasion -- the economics departments of U.S. research universities played a major role in training many of the economists from around the world in neoliberal principles -- and coercion to export neoliberalization far and wide. The purge of Keynesian economists and their replacement by neoliberal monetarists in the International Monetary Fund in 1982 transformed the U.S.-dominated IMF into a prime agent of neoliberalization through its structural adjustment programs visited upon any state (and there were many in the 1980s and 1990s) that required its help with debt repayments. The Washington Consensus that was forged in the 1990s and the negotiating rules set up under the World Trade Organization in 1998 confirmed the global turn toward neoliberal practices. 12

The new international compact also depended upon the reanimation and reconfiguration of the U.S. imperial tradition. That tradition had been forged in Central America in the 1920s, as a form of domination without colonies. Independent republics could be kept under the thumb of the United States and effectively act, in the best of cases, as proxies for U.S. interests through the support of strongmen -- like Somoza in Nicaragua, the Shah in Iran, and Pinochet in Chile -- and a coterie of followers backed by military assistance and financial aid. Covert aid was available to promote the rise to power of such leaders, but by the 1970s it became clear that something else was needed: the opening of markets, of new spaces for investment, and clear fields where financial powers could operate securely. This entailed a much closer integration of the global economy with a well-defined financial architecture. The creation of new institutional practices, such as those set out by the IMF and the WTO, provided convenient vehicles through which financial and market power could be exercised. The model required collaboration among the top capitalist powers and the Group of Seven (G7), bringing Europe and Japan into alignment with the United States to shape the global financial and trading system in ways that effectively forced all other nations to submit. "Rogue nations," defined as those that failed to conform to these global rules, could then be dealt with by sanctions or coercive and even military force if necessary. In this way, U.S. neoliberal imperialist strategies were articulated through a global network of power relations, one effect of which was to permit the U.S. upper classes to exact financial tribute and command rents from the rest of the world as a means to augment their already hegemonic control. 13

Neoliberalism as Creative Destruction

In what ways has neoliberalization resolved the problems of flagging capital accumulation? Its actual record in stimulating economic growth is dismal. Aggregate growth rates stood at 3.5 percent or so in the 1960s and even during the troubled 1970s fell to only 2.4 percent. The subsequent global growth rates of 1.4 percent and 1.1 percent for the 1980s and 1990s, and a rate that barely touches 1 percent since 2000, indicate that neoliberalism has broadly failed to

In what ways has neoliberalization resolved the problems of flagging capital accumulation? Its actual record in stimulating economic growth is dismal. Aggregate growth rates stood at 3.5 percent or so in the 1960s and even during the troubled 1970s fell to only 2.4 percent. The subsequent global growth rates of 1.4 percent and 1.1 percent for the 1980s and 1990s, and a rate that barely touches 1 percent since 2000, indicate that neoliberalism has broadly failed to stimulate worldwide growth. 14 Even if we exclude from this calculation the catastrophic effects of the collapse of the Russian and some Central European economies in the wake of the neoliberal shock therapy treatment of the 1990s, global economic performance from the standpoint of restoring the conditions of general capital accumulation has been weak.

Despite their rhetoric about curing sick economies, neither Britain nor the United States achieved high economic performance in the 1980s. That decade belonged to Japan, the East Asian "Tigers," and West Germany as powerhouses of the global economy. Such countries were very successful, but their radically different institutional arrangements make it difficult to pin their achievements on neoliberalism. The West German Bundesbank had taken a strong monetarist line (consistent with neoliberalism) for more than two decades, a fact suggesting that there is no necessary connection between monetarism per se and the quest to restore class power. In West Germany, the unions remained strong and wage levels stayed relatively high alongside the construction of a progressive welfare state. One of the effects of this combination was to stimulate a high rate of technological innovation that kept West Germany well ahead in the field of international competition. Export-led production moved the country forward as a global leader.

In Japan, independent unions were weak or nonexistent, but state investment in technological and organizational change and the tight relationship between corporations and financial institutions (an arrangement that also proved felicitous in West Germany) generated an astonishing export-led growth performance, very much at the expense of other capitalist economies such as the United Kingdom and the United States. Such growth as there was in the 1980s (and the aggregate rate of growth in the world was lower even than that of the troubled 1970s) did not depend, therefore, on neoliberalization. Many European states therefore resisted neoliberal reforms and increasingly found ways to preserve much of their social democratic heritage while moving, in some cases fairly successfully, toward the West German model. In Asia, the Japanese model implanted under authoritarian systems of governance in South Korea, Taiwan, and Singapore also proved viable and consistent with reasonable equality of distribution. It was only in the 1990s that neoliberalization began to pay off for both the United States and Britain. This happened in the midst of a long-drawn-out period of deflation in Japan and relative stagnation in a newly unified Germany. Up for debate is whether the Japanese recession occurred as a simple result of competitive pressures or whether it was engineered by financial agents in the United States to humble the Japanese economy.

So why, then, in the face of this patchy if not dismal record, have so many been persuaded that neoliberalization is a successful solution? Over and beyond the persistent stream of propaganda emanating from the neoliberal think tanks and suffusing the media, two material reasons stand out. First, neoliberalization has been accompanied by increasing volatility within global capitalism. That success was to materialize somewhere obscured the reality that neoliberalism was generally failing. Periodic episodes of growth interspersed with phases of creative destruction, usually registered as severe financial crises. Argentina was opened up to foreign capital and privatization in the 1990s and for several years was the darling of Wall Street, only to collapse into disaster as international capital withdrew at the end of the decade. Financial collapse and social devastation was quickly followed by a long political crisis. Financial turmoil proliferated all over the developing world, and in some instances, such as Brazil and Mexico, repeated waves of structural adjustment and austerity led to economic paralysis.

On the other hand, neoliberalism has been a huge success from the standpoint of the upper classes. It has either restored class position to ruling elites, as in the United States and Britain, or created conditions for capitalist class formation, as in China, India, Russia, and elsewhere. Even countries that have suffered extensively from neoliberalization have seen the massive reordering of class structures internally. The wave of privatization that came to Mexico with the Salinas de Gortari administration in 1992 spawned unprecedented concentrations of wealth in the hands of a few people (Carlos Slim, tor example, who took over the state telephone system and became an instant billionaire).

With the media dominated by upper-class interests, the myth could be propagated that certain sectors failed because they were not competitive enough, thereby setting the stage for even more neoliberal reforms. Increased social inequality was necessary to encourage entrepreneurial risk and innovation, and these, in turn, conferred competitive advantage and stimulated growth. If conditions among the lower classes deteriorated, it was because they failed for personal and cultural reasons to enhance their own human capital through education, the acquisition of a protestant work ethic, and submission to work discipline and flexibility. In short, problems arose because of the lack of competitive strength or because of personal, cultural, and political failings. In a Spencerian world, the argument went, only the fittest should and do survive. Systemic problems were masked under a blizzard of ideological pronouncements and a plethora of localized crises.

If the main effect of neoliberalism has been redistributive rather than generative, then ways had to be found to transfer assets and channel wealth and income either from the mass of the population toward the upper classes or from vulnerable to richer countries. I have elsewhere provided an account of these processes under the rubric of accumulation by dispossession. 15 By this, I mean the continuation and proliferation of accretion practices that Marx had designated as "primitive" or "original" during the rise of capitalism. These include

(1) the commodification and privatization of land and me forceful expulsion or peasant populations {as in Mexico and India in recent times);

(2) conversion of various forms of property rights (common, collective, state, etc.) into exclusively private property rights;

(3) suppression of rights to the commons;

(4) commodification of labor power and the suppression of alternative (indigenous) forms of production and consumption;

(5) colonial, neocolonial, and imperial processes of appropriation of assets (including natural resources); (6) monetization of exchange and taxation, particularly of land;

(7) the slave trade (which continues, particularly in the sex industry); and

(8) usury, the national debt, and, most devastating of all, the use of the credit system as radical means of primitive accumulation.

The state, with its monopoly of violence and definitions of legality, plays a crucial role in backing and promoting these processes. To this list of mechanisms, we may now add a raft of additional techniques, such as the extraction of rents from patents and intellectual property rights and the diminution or erasure of various forms of communal property rights -- such as state pensions, paid vacations, access to education, and health care -- won through a generation or more of social democratic struggles. The proposal to privatize all state pension rights (pioneered in Chile under Augusto Pinochet s dictatorship) is, for example, one of the cherished objectives of neoliberals in the United States.

In the cases of China and Russia, it might be reasonable to refer to recent events in "primitive" and "original" terms, but the practices that restored class power to capitalist elites in the United States and elsewhere are best described as an ongoing process of accumulation by dispossession that grew rapidly under neoliberalism. In what follows, I isolate four main elements.

1. Privatization

The corporatization, commodification, and privatization of hitherto public assets have been signal features of the neoliberal project. Its primary aim has been to open up new fields for capital accumulation in domains formerly regarded off-limits to the calculus of profitability. Public utilities of all lands (water, telecommunications, transportation), social welfare provision (public housing, education, health care, pensions), public institutions (such as universities, research laboratories, prisons), and even warfare (as illustrated by the "army" of private contractors operating alongside the armed forces in Iraq) have all been privatized to some degree throughout the capitalist world.

Intellectual property rights established through the so-called TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement within the WTO defines genetic materials, seed plasmas, and all manner of other products as private property. Rents for use can then be extracted from populations whose practices had played a crucial role in the development of such genetic materials. Bio-piracy is rampant, and the pillaging of the worlds stockpile of genetic resources is well under way to the benefit of a few large pharmaceutical companies. The escalating depletion of the global environmental commons (land, air, water) and proliferating habitat degradations that preclude anything but capital-intensive modes of agricultural production have likewise resulted from the wholesale commodification of nature in all its forms. The commodification (through tourism) of cultural forms, histories, and intellectual creativity entails wholesale dispossessions (the music industry is notorious for the appropriation and exploitation of grassroots culture and creativity). As in the past, the power of the state is frequently used to force such processes through even against popular will. The rolling back of regulatory frameworks designed to protect labor and the environment from degradation has entailed the loss of rights. The reversion of common property rights won through years of hard class struggle (the right to a state pension, to welfare, to national health care) into the private domain has been one of the most egregious of all policies of dispossession pursued in the name of neoliberal orthodoxy.

The corporatization, commodification, and privatization of hitherto public assets have been signal features of the neoliberal project.

All of these processes amount to the transfer of assets from the public and popular realms to the private and class-privileged domains. Privatization, Arundhati Roy argued with respect to the Indian case, entails "the transfer of productive public assets from the state to private companies. Productive assets include natural resources: earth, forest, water, air. These are the assets that the state holds in trust for the people it represents. ... To snatch these away and sell them as stock to private companies is a process of barbaric dispossession on a scale that has no parallel in history." 16

2. Financialization

The strong financial wave that set in after 1980 has been marked by its speculative and predatory style. The total daily turnover of financial transactions in international markets that stood at $2.3 billion in 1983 had risen to $130 billion by 2001. This $40 trillion annual turnover in 2001 compares to the estimated $800 billion that would be required to support international trade and productive investment flows. 17 Deregulation allowed the financial system to become one of the main centers of redistributive activity through speculation, predation, fraud, and thievery. Stock promotions; Ponzi schemes; structured asset destruction through inflation; asset stripping through mergers and acquisitions; and the promotion of debt incumbency that reduced whole populations, even in the advanced capitalist countries, to debt peonage -- to say nothing of corporate fraud and dispossession of assets, such as the raiding of pension hinds and their decimation by stock and corporate collapses through credit and stock manipulations -- are all features of the capitalist financial system.

The emphasis on stock values, which arose after bringing together the interests of owners and managers of capital through the remuneration of the latter in stock options, led, as we now know, to manipulations in the market that created immense wealth for a few at the expense of the many. The spectacular collapse of Enron was emblematic of a general process that deprived many of their livelihoods and pension rights. Beyond this, we also must look at the speculative raiding carried out by hedge funds and other major instruments of finance capital that formed the real cutting edge of accumulation by dispossession on the global stage, even as they supposedly conferred the positive benefit to the capitalist class of spreading risks.

3. The management and manipulation of crises

Beyond the speculative and often fraudulent froth that characterizes much of neoliberal financial manipulation, there lies a deeper process that entails the springing of the debt trap as a primary means of accumulation by dispossession. Crisis creation, management, and manipulation on the world stage has evolved into the fine art of deliberative redistribution of wealth from poor countries to the rich. By suddenly raising interest rates in 1979, Paul Volcker, then chairman of the U.S. Federal Reserve, raised the proportion of foreign earnings that borrowing countries had to put to debt-interest payments. Forced into bankruptcy, countries like Mexico had to agree to structural adjustment. While proclaiming its role as a noble leader organizing bailouts to keep global capital accumulation stable and on track, the United States could also open the way to pillage the Mexican economy through deployment of its superior financial power under conditions of local crisis. This was what the U.S. Treasury/Wall Street/IMF complex became expert at doing everywhere. Volker s successor, Alan Greenspan, resorted to similar tactics several times in the 1990s. Debt crises in individual countries, uncommon in the 1960s, became frequent during the 1980s and 1990s. Hardly any developing country remained untouched and in some cases, as in Latin America, such crises were frequent enough to be considered endemic. These

debt crises were orchestrated, managed, and controlled both to rationalize the system and to redistribute assets during the 1980s and 1990s. Wade and Veneroso captured the essence of this trend when they wrote of the Asian crisis -- provoked initially by the operation of U.S.-based hedge funds -- of 1997 and 1998:

Financial crises have always caused transfers of ownership and power to those who keep their own assets intact and who are in a position to create credit, and the Asian crisis is no exception . . . there is no doubt that Western and Japanese corporations are the big winners. . . . The combination of massive devaluations pushed financial liberalization, and IMF-facilitated recovery may even precipitate the biggest peacetime transfer of assets from domestic to foreign owners in the past fifty years anywhere in the world, dwarfing the transfers from domestic to U.S. owners in Latin America in the 1980s or in Mexico after 1994. One recalls the statement attributed to Andrew Mellon: "In a depression assets return to their rightful owners." 18

The analogy to the deliberate creation of unemployment to produce a pool of low-wage surplus labor convenient for further accumulation is precise. Valuable assets are thrown out of use and lose their value. They lie fallow and dormant until capitalists possessed of liquidity choose to seize upon them and breathe new life into them. The danger, however, is that crises can spin out of control and become generalized, or that revolts will arise against the system that creates them. One of the prime functions of state interventions and of international institutions is to orchestrate crises and devaluations in ways that permit accumulation by dispossession to occur without sparking a general collapse or popular revolt. The structural adjustment program administered by the Wall Street/Treasury/ IMF complex takes care of the first function. It is the job of the comprador neoliberal state apparatus (backed by military assistance from the imperial powers) to ensure that insurrections do not occur in whichever country has been raided. Yet signs of popular revolt have emerged, first with the Zapatista uprising in Mexico in 1994 and later in the generalized discontent that informed anti-globalization movements such as the one that culminated in Seattle in 1999.

4. State redistributions

The state, once transformed into a neoliberal set of institutions, becomes a prime agent of redistributive policies, reversing the flow from upper to lower classes that had been implemented during the preceding social democratic era. It does this in the first instance through privatization schemes and cutbacks in government expenditures meant to support the social wage. Even when privatization appears as beneficial to the lower classes, the long-term effects can be negative. At first blush, for example, Thatchers program for the privatization of social housing in Britain appeared as a gift to the lower classes whose members could now convert from rental to ownership at a relatively low cost, gain control over a valuable asset, and augment their wealth. But once the transfer was accomplished, housing speculation took over particularly in prime central locations, eventually bribing or forcing low-income populations out to the periphery in cities like London and turning erstwhile working-class housing estates into centers of intense gentrification. The loss of affordable housing in central areas produced homelessness for many and extraordinarily long commutes for those who did have low-paying service jobs. The privatization of the ejidos (indigenous common property rights in land under the Mexican constitution) in Mexico, which became a central component of the neoliberal program set up during the 1990s, has had analogous effects on the Mexican peasantry, forcing many rural dwellers into the cities in search of employment. The Chinese state has taken a whole series of draconian measures through which assets have been conferred upon a small elite to the detriment of the masses.

The neoliberal state also seeks redistributions through a variety of other means such as revisions in the tax code to benefit returns on investment rather than incomes and wages, promotion of regressive elements in the tax code (such as sales taxes), displacement of state expenditures and free access to all by user fees (e.g., on higher education), and the provision of a vast array of subsidies and tax breaks to corporations. The welfare programs that now exist in the United States at federal, state, and local levels amount to a vast redirection of public moneys for corporate benefit (directly as in the case of subsidies to agribusiness and indirectly as in the case of the military-industrial sector), in much the same way that the mortgage interest rate tax deduction operates in the United States as a massive subsidy to upper-income home owners and the construction of industry. Heightened surveillance and policing and, in the case of the United States, the incarceration of recalcitrant elements in the population indicate a more sinister role of intense social control. In developing countries, where opposition to neoliberalism and accumulation by dispossession can be stronger, the role of the neoliberal state quickly assumes that of active repression even to the point of low level warfare against oppositional movements (many of which can now conveniently be designated as terrorist to garner U.S. military assistance and support) such as the Zapatistas in Mexico or landless peasants in Brazil.

In effect, reported Roy, "India's rural economy, which supports seven hundred million people, is being garroted. Farmers who produce too much are in distress, farmers who produce too little are in distress, and landless agricultural laborers are out of work as big estates and farms lay off their workers. They're all flocking to the cities in search of employment." 19 In China, the estimate is that at least half a billion people will have to be absorbed by urbanization over the next ten years if rural mayhem and revolt is to be avoided. What those migrants will do in the cities remains unclear, though the vast physical infrastructural plans now in the works will go some way to absorbing the labor surpluses released by primitive accumulation.

The redistributive tactics of neoliberalism are wide-ranging, sophisticated, frequently masked by ideological gambits, but devastating for the dignity and social well-being of vulnerable populations and territories. The wave of creative destruction neoliberalization has visited across the globe is unparalleled in the history of capitalism. Understandably, it has spawned resistance and a search for viable alternatives.

[Sep 19, 2017] Time for a Conservative Anti-Monopoly Movement by Daniel Kishi

Sep 19, 2017 | www.theamericanconservative.com

Amazon, Facebook and Google: The new robber barons?

Amazon CEO Jeff Bezos in 2010. Credit: /CreativeCommons/SteveJurvetson Earlier this month Amazon, announced its plans to establish a second headquarters in North America. Rather than simply reveal which city would become its second home, the Seattle-based tech company opted instead to open a bidding war. In an eight page document published on its website, Amazon outlined the criteria for prospective suitors, and invited economic developers to submit proposals advocating for why their city or region should be the host of the new location.

Its potential arrival comes with the claim that the company will invest more than $5 billion in construction and generate up to 50,000 "high paying jobs." Mayors and governors, hard at work crafting their bids, are no doubt salivating at the mere thought of such economic activity. Journalists and editorial teams in eligible metropolises are also playing their parts, as newspapers have published a series of articles and editorials making the case for why their city should be declared the winner.

Last Tuesday Bloomberg reported that Boston was the early frontrunner, sending a wave of panic across the continent. Much to the relief of the other contenders, Amazon quickly discredited the report as misinformation, announcing in a series of tweets on Wednesday that it is "energized by the response from cities across [North America]" and that, contrary to the rumors, there are currently no front-runners on their "equal playing field."

That Amazon is "energized" should come as no surprise. Most companies would also be energized by the taxpayer-funded windfall that is likely coming its way. Reporters speculate that the winner of the sweepstakes!in no small part to the bidding war format!could be forced to cough up hundreds of millions of dollars in state and local subsidies for the privilege of hosting Amazon's expansion.

Amazon has long been the beneficiary of such subsidies, emerging in recent years as a formidable opponent to Walmart as the top recipient of corporate welfare. According to Good Jobs First, a Washington, D.C. organization dedicated to corporate and government accountability, Amazon has received more than $1 billion in local and state subsidies since 2000. With a business plan dedicated to amassing long-term market share in lieu of short-term profits, Amazon, under the leadership of its founder and chief executive, Jeff Bezos, operates on razor-thin profit margins in most industries, while actually operating at a loss in others. As such, these state and local subsidies have played an instrumental role in Amazon's growth

Advocates of free market enterprise should be irate over the company's crony capitalist practices and the cities and states that enable it. But more so than simply ruffling the feathers of the libertarian-minded, Amazon's shameless solicitation for subsidies capped off a series of summer skirmishes in the Democratic left's emerging war against monopolies.

Earlier this summer when Amazon announced its $13.7 billion purchase of Whole Foods, antitrust advocates called upon the Department of Justice and the Federal Trade Commission's Antitrust Division to block the sale and update the United States government's legal definition of monopoly. Although the acquisition!which was approved in August!only gives Amazon a 1.5 percent market share in the grocery industry, it more importantly provides the tech giant with access to more than 450 brick-and-mortar Whole Foods locations. Critics say that these physical locations will prove invaluable to its long term plan of economic dominance, and that it is but the latest advance in the company's unprecedented control of the economy's underlying infrastructure.

Google also found itself in the crosshairs of the left's anti-monopoly faction when, in late June, the European Union imposed a $2.7 billion fine against the tech company for anti-competitive search engine manipulation in violation of its antitrust laws. The Open Markets Program of the New America Foundation subsequently published a press release applauding the EU's decision. Two months later, the Open Markets Program was axed . The former program director Barry Lynn claims that his employers caved to pressure from a corporation that has donated more than $21 million to the New America Foundation. The fallout emboldened journalists to share their experiences of being silenced by the tech giant, and underscores the influence Google exerts over think tanks and academics

Most recently, Facebook faced criticism after it was discovered that a Russian company with ties to the Kremlin purchased $100,000 in ads from the social media company in an effort to influence the 2016 presidential election. Facebook, as a result, has become the latest subject of interest in Robert Mueller's special investigation into Russian interference in last fall's election. But regardless of whether the ads influenced the outcome, the report elicited demands for transparency and oversight in a digital ad marketplace that Facebook, along with Google, dominates . By using highly sophisticated algorithms, Facebook and Google receive more than 60 percent of all digital ad revenue, threatening the financial solvency of publishers and creating a host of economic incentives that pollute editorial autonomy.

While the Democratic left!in an effort to rejuvenate its populist soul !has been at the front lines in the war against these modern-day robber barons, Stacy Mitchell, co-director of the Institute of Local Self-Reliance, suggests that opposition to corporate consolidation need not be a partisan issue. In a piece published in The Atlantic , Mitchell traces the bipartisan history of anti-monopoly sentiment in American politics. She writes :

If "monopoly" sounds like a word from another era, that's because, until recently, it was. Throughout the middle of the 20th century, the term was frequently used in newspaper headlines, campaign speeches, and State of the Union addresses delivered by Republican and Democratic presidents alike. Breaking up too-powerful companies was a bipartisan goal and on the minds of many voters. But, starting in the 1970s, the word retreated from the public consciousness. Not coincidentally, at the same time, the enforcement of anti-monopoly policy grew increasingly toothless.

Although the modern Republican Party stands accused of cozying up with corporate interests, the history of conservative thought has a rich intellectual tradition of being skeptical!if not hostile!towards economic consolidation. For conservatives and libertarians wedded to the tenets of free market orthodoxy!or for Democrats dependent on campaign contributions from a donor class of Silicon Valley tycoons!redefining the legal definition of monopoly and rekindling a bipartisan interest in antitrust enforcement are likely non-starters.

But for conservatives willing to break from the principles of free market fundamentalism, the papal encyclicals of the Roman Catholic Church, the distributist thought of Hilaire Belloc and G.K. Chesterton, the social criticism of Christopher Lasch, and the observations of agrarian essayist Wendell Berry provide an intellectual framework from which conservatives can critique and combat concentrated economic power. With a respect for robust and resilient localities and a keen understanding of the moral dangers posed by an economy perpetuated by consumerism and convenience, these writers appeal to the moral imaginations of the reader, issuing warnings about the detrimental effects that economic consolidation has on the person, the family, the community, and society at large.

The events of this summer underscore the immense political power wielded by our economy's corporate giants. To those who recognize the dangers posed by our age of consolidation, the skirmishes from this summer could serve as a rallying cry in a bipartisan war for independence from our corporate crown.

Daniel Kishi is an editorial assistant at The American Conservative . Follow him on Twitter at @DanielMKishi

[Aug 19, 2017] Vassal Aristocracies Increasingly Resist Control by US Aristocracy by Eric Zuesse

Notable quotes:
"... The MIC is their collective arm, and their collective fist. It is not the American public's global enforcer; it is the American aristocracy's fist, around the world. ..."
"... The MIC (via its military contractors such as Lockheed Martin) also constitutes a core part of the U.S. aristocracy's wealth (the part that's extracted from the U.S. taxpaying public via the U.S. government), and also (by means of those privately-owned contractors, plus the taxpayer-funded U.S. armed forces) it protects these aristocrats' wealth in foreign countries. Though paid by the U.S. government, the MIC does the protection-and-enforcement jobs for the nation's super-rich. ..."
"... So, the MIC is the global bully's fist, and the global bully is the U.S. aristocracy -- America's billionaires, most especially the controlling stockholders in the U.S.-based international corporations. These are the people the U.S. government actually represents . The links document this, and it's essential to know, if one is to understand current events. ..."
"... This massacre didn't play well on local Crimean television. Immediately, a movement to secede and to again become a part of Russia started, and spread like wildfire in Crimea. (Crimea had been only involuntarily transferred from Russia to Ukraine by the Soviet dictator Khrushchev in 1954; it had been part of Russia for the hundreds of years prior to 1954. It was culturally Russian.) Russia's President, Vladimir Putin, said that if they'd vote for it in a referendum, then Russia would accept them back into the Russian Federation and provide them protection as Russian citizens. ..."
"... The latest round of these sanctions was imposed not by Executive Order from a U.S. President, but instead by a new U.S. law, "H.R.3364 -- Countering America's Adversaries Through Sanctions Act" , which in July 2017 was passed by 98-2 in the Senate and 419-3 in the House , and which not only stated outright lies (endorsed there by virtually everyone in Congress), but which was backed up by lies from the U.S. Intelligence Community that were accepted and endorsed totally uncritically by 98 Senators and 419 Representatives . (One might simply assume that all of those Senators and Representatives were ignorant of the way things work and were not intentionally lying in order to vote for these lies from the Intelligence Community, but these people actually wouldn't have wrangled their ways into Congress and gotten this far at the game if they hadn't already known that the U.S. Intelligence Community is designed not only to inform the President but to help him to deceive the public and therefore can't be trusted by anyone but the President . ..."
Aug 14, 2017 | www.unz.com

The tumultuous events that dominate international news today cannot be accurately understood outside of their underlying context, which connects them together, into a broader narrative -- the actual history of our time . History makes sense, even if news-reports about these events don't. Propagandistic motivations cause such essential facts to be reported little (if at all) in the news, so that the most important matters for the public to know, get left out of news-accounts about those international events.

The purpose here will be to provide that context, for our time.

First, this essential background will be summarized; then, it will be documented (via the links that will be provided here), up till the present moment -- the current news: America's aristocracy controls both the U.S. federal government and press , but (as will be documented later here) is facing increasing resistance from its many vassal (subordinate) aristocracies around the world (popularly called "America's allied nations"); and this growing international resistance presents a new challenge to the U.S. military-industrial complex (MIC), which is controlled by that same aristocracy and enforces their will worldwide. The MIC is responding to the demands of its aristocratic master. This response largely drives international events today (which countries get invaded, which ones get overthrown by coups, etc.), but the ultimate driving force behind today's international news is the aristocracy that the MIC represents, the billionaires behind the MIC, because theirs is the collective will that drives the MIC. The MIC is their collective arm, and their collective fist. It is not the American public's global enforcer; it is the American aristocracy's fist, around the world.

The MIC (via its military contractors such as Lockheed Martin) also constitutes a core part of the U.S. aristocracy's wealth (the part that's extracted from the U.S. taxpaying public via the U.S. government), and also (by means of those privately-owned contractors, plus the taxpayer-funded U.S. armed forces) it protects these aristocrats' wealth in foreign countries. Though paid by the U.S. government, the MIC does the protection-and-enforcement jobs for the nation's super-rich.

Furthermore, the MIC is crucial to them in other ways, serving not only directly as their "policeman to the world," but also indirectly (by that means) as a global protection-racket that keeps their many subordinate aristocracies in line, under their control -- and that threatens those foreign aristocrats with encroachments against their own territory, whenever a vassal aristocracy resists the master-aristocracy's will. (International law is never enforced against the U.S., not even after it invaded Iraq in 2003.) So, the MIC is the global bully's fist, and the global bully is the U.S. aristocracy -- America's billionaires, most especially the controlling stockholders in the U.S.-based international corporations. These are the people the U.S. government actually represents . The links document this, and it's essential to know, if one is to understand current events.

For the first time ever, a global trend is emerging toward declining control of the world by America's billionaire-class -- into the direction of ultimately replacing the U.S. Empire, by increasingly independent trading-blocs: alliances between aristocracies, replacing this hierarchical control of one aristocracy over another. Ours is becoming a multi-polar world, and America's aristocracy is struggling mightily against this trend, desperate to continue remaining the one global imperial power -- or, as U.S. President Barack Obama often referred to the U.S. government, "The United States is and remains the one indispensable nation. That has been true for the century passed and it will be true for the century to come." To America's aristocrats, all other nations than the U.S. are "dispensable." All American allies have to accept it. This is the imperial mindset, both for the master, and for the vassal. The uni-polar world can't function otherwise. Vassals must pay (extract from their nation's public, and then transfer) protection-money, to the master, in order to be safe -- to retain their existing power, to exploit their given nation's public.

The recently growing role of economic sanctions (more accurately called "Weaponization of finance" ) by the United States and its vassals, has been central to the operation of this hierarchical imperial system, but is now being increasingly challenged from below, by some of the vassals. Alliances are breaking up over America's mounting use of sanctions, and new alliances are being formed and cemented to replace the imperial system -- replace it by a system without any clear center of global power, in the world that we're moving into. Economic sanctions have been the U.S. empire's chief weapon to impose its will against any challengers to U.S. global control, and are thus becoming the chief locus of the old order's fractures .

This global order cannot be maintained by the MIC alone; the more that the MIC fails (such as in Vietnam, Iraq, Afghanistan, Syria, ), the more that economic sanctions rise to become the essential tool of the imperial masters. We are increasingly in the era of economic sanctions. And, now, we're entering the backlash-phase of it.

A turning-point in escalating the weaponization of finance was reached in February 2014 when a Ukrainian coup that the Obama Administration had started planning by no later than 2011, culminated successfully in installing a rabidly anti-Russian government on Russia's border, and precipitated the breakaway from Ukraine of two regions (Crimea and Donbass) that had voted overwhelmingly for the man the U.S. regime had just overthrown . This coup in Ukraine was the most direct aggressive act against Russia since the Cold War had 'ended' (it had actually ended on the Russian side, but not on the American side, where it continues ) in 1991. During this coup in Kiev, on February 20th of 2014, hundreds of Crimeans, who had been peacefully demonstrating there with placards against this coup (which coup itself was very violent -- against the police, not by them -- the exact opposite of the way that "the Maidan demonstrations" had been portrayed in the Western press at the time), were attacked by the U.S.-paid thugs and scrambled back into their buses to return home to Crimea but were stopped en-route in central Ukraine and an uncounted number of them were massacred in the Ukrainian town of Korsun by the same group of thugs who had chased them out of Kiev .

This massacre didn't play well on local Crimean television. Immediately, a movement to secede and to again become a part of Russia started, and spread like wildfire in Crimea. (Crimea had been only involuntarily transferred from Russia to Ukraine by the Soviet dictator Khrushchev in 1954; it had been part of Russia for the hundreds of years prior to 1954. It was culturally Russian.) Russia's President, Vladimir Putin, said that if they'd vote for it in a referendum, then Russia would accept them back into the Russian Federation and provide them protection as Russian citizens.

On 6 March 2014, U.S. President Obama issued "Executive Order -- Blocking Property of Certain Persons Contributing to the Situation in Ukraine" , and ignored the internationally recognized-in-law right of self-determination of peoples (though he recognized that right in Catalonia and in Scotland), and he instead simply declared that Ukraine's "sovereignty" over Crimea was sacrosanct (even though it had been imposed upon Crimeans by the Soviet dictator -- America's enemy -- in 1954, during the Soviet era, when America opposed, instead of favored and imposed, dictatorship around the world, except in Iran and Guatemala, where America imposed dictatorships even that early). Obama's Executive Order was against unnamed "persons who have asserted governmental authority in the Crimean region without the authorization of the Government of Ukraine." He insisted that the people who had just grabbed control of Ukraine and massacred Crimeans (his own Administration's paid far-right Ukrainian thugs, who were racist anti-Russians ), must be allowed to rule Crimea, regardless of what Crimeans (traditionally a part of Russia) might -- and did -- want. America's vassal aristocracies then imposed their own sanctions against Russia when on 16 March 2014 Crimeans voted overwhelmingly to rejoin the Russian Federation . Thus started the successive rounds of economic sanctions against Russia, by the U.S. government and its vassal-nations . (As is shown by that link, they knew that this had been a coup and no authentic 'democratic revolution' such as the Western press was portraying it to have been, and yet they kept quiet about it -- a secret their public would not be allowed to know.)

The latest round of these sanctions was imposed not by Executive Order from a U.S. President, but instead by a new U.S. law, "H.R.3364 -- Countering America's Adversaries Through Sanctions Act" , which in July 2017 was passed by 98-2 in the Senate and 419-3 in the House , and which not only stated outright lies (endorsed there by virtually everyone in Congress), but which was backed up by lies from the U.S. Intelligence Community that were accepted and endorsed totally uncritically by 98 Senators and 419 Representatives . (One might simply assume that all of those Senators and Representatives were ignorant of the way things work and were not intentionally lying in order to vote for these lies from the Intelligence Community, but these people actually wouldn't have wrangled their ways into Congress and gotten this far at the game if they hadn't already known that the U.S. Intelligence Community is designed not only to inform the President but to help him to deceive the public and therefore can't be trusted by anyone but the President .

It's basic knowledge about the U.S. government, and they know it, though the public don't.) The great independent columnist Paul Craig Roberts headlined on August 1st, "Trump's Choices" and argued that President Donald Trump should veto the bill despite its overwhelming support in Washington, but instead Trump signed it into law on August 2nd and thus joined participation in the overt stage -- the Obama stage -- of the U.S. government's continuation of the Cold War that U.S. President George Herbert Walker Bush had secretly instituted against Russia on 24 February 1990 , and that, under Obama, finally escalated into a hot war against Russia. The first phase of this hot war against Russia is via the "Weaponization of finance" (those sanctions). However, as usual, it's also backed up by major increases in physical weaponry , and by the cooperation of America's vassals in order to surround Russia with nuclear weapons near and on Russia's borders , in preparation for a possible blitz first-strike nuclear attack upon Russia -- preparations that the Russian people know about and greatly fear, but which are largely hidden by the Western press, and therefore only very few Westerners are aware that their own governments have become lying aggressors.

Some excellent news-commentaries have been published about this matter, online, by a few 'alternative news' sites (and that 'alt-news' group includes all of the reliably honest news-sites, but also includes unfortunately many sites that are as dishonest as the mainstream ones are -- and that latter type aren't being referred to here), such as (and only the best sites and articles will be linked-to on this):

All three of those articles discuss how these new sanctions are driving other nations to separate themselves, more and more, away from the economic grip of the U.S. aristocracy, and to form instead their own alliances with one-another, so as to defend themselves, collectively, from U.S. economic (if not also military) aggression. Major recent news-developments on this, have included (all here from rt dot com):

"'US, EU meddle in other countries & kill people under guise of human rights concerns' – Duterte", and presented Philippine President Rodrigo Duterte explaining why he rejects the U.S. aristocracy's hypocritical pronouncements and condemnations regarding its vassals among the world's poorer and struggling nations, such as his. Of course, none of this information is publishable in the West -- in the Western 'democracies'. It's 'fake news', as far as The Empire is concerned. So, if you're in The (now declining) Empire, you're not supposed to be reading this. That's why the mainstream 'news'media (to all of which this article is being submitted for publication, without fee, for any of them that want to break their existing corrupt mold) don't publish this sort of news -- 'fake news' (that's of the solidly documented type, such as this). You'll see such news reported only in the few honest newsmedia. The rule for the aristocracy's 'news'media is: report what happened, only on the basis of the government's lies as to why it happened -- never expose such lies (the official lies). What's official is 'true' . That, too, is an essential part of the imperial system.

The front cover of the American aristocracy's TIME magazine's Asian edition, dated September 25, 2016, had been headlined "Night Falls on the Philippines: The tragic cost of President Duterte's war on drugs" . The 'news'-story, which was featured inside not just the Asian but all editions, was "Inside Philippine President Rodrigo Duterte's War On Drugs" , and it portrayed Duterte as a far-right demagogue who was giving his nation's police free reign to murder anyone they wished to, especially the poor. On 17 July 2017, China's Xinhua News Agency bannered "Philippines' Duterte enjoys high approval rating at 82 percent: poll" , and reported: "A survey by Pulse Asia Inc. conducted from June 24 to June 29 showed that 82 percent of the 1,200 people surveyed nationwide approved the way Duterte runs the country. Out of all the respondents, the poll said 13 percent were undecided about Duterte's performance, while 5 percent disapproved Duterte's performance. Duterte, who assumed the presidency in June last year, ends his single, six-year term in 2022." Obviously, it's not likely that the TIME cover story had actually been honest. But, of course, America's billionaires are even more eager to overthrow Russia's President, Putin.

Western polling firms can freely poll Russians, and do poll them on lots but not on approval or disapproval of President Putin , because he always scores above 80%, and America's aristocrats also don't like finding that confirmed, and certainly don't want to report it. Polling is routinely done in Russia, by Russian pollsters, on voters' ratings of approval/disapproval of Putin's performance. Because America's aristocrats don't like the findings, they say that Russians are in such fear of Putin they don't tell the truth about this, or else that Russia's newsmedia constantly lie about him to cover up the ugly reality about him.

However, the Western academic journal Post-Soviet Affairs (which is a mainstream Western publication) included in their January/February 2017 issue a study, "Is Putin's Popularity Real?" and the investigators reported the results of their own poll of Russians, which was designed to tap into whether such fear exists and serves as a distorting factor in those Russian polls, but concluded that the findings in Russia's polls could not be explained by any such factor; and that, yes, Putin's popularity among Russians is real. The article's closing words were: "Our results suggest that the main obstacle at present to the emergence of a widespread opposition movement to Putin is not that Russians are afraid to voice their disapproval of Putin, but that Putin is in fact quite popular."

The U.S. aristocracy's efforts to get resistant heads-of-state overthrown by 'democratic revolutions' (which usually is done by the U.S. government to overthrow democratically elected Presidents -- such as Mossadegh, Arbenz, Allende, Zelaya, Yanukovych, and attempted against Assad, and wished against Putin, and against Duterte -- not overthrowing dictators such as the U.S. government always claims) have almost consistently failed, and therefore coups and invasions have been used instead, but those techniques demand that certain realities be suppressed by their 'news'media in order to get the U.S. public to support what the government has done -- the U.S. government's international crime, which is never prosecuted. Lying 'news' media in order to 'earn' the American public's support, does not produce enthusiastic support, but, at best, over the long term, it produces only tepid support (support that's usually below the level of that of the governments the U.S. overthrows). U.S. Presidents never score above 80% except when they order an invasion in response to a violent attack by foreigners, such as happened when George W. Bush attacked Afghanistan and Iraq in the wake of 9/11, but those 80%+ approval ratings fade quickly; and, after the 1960s, U.S. Presidential job-approvals have generally been below 60% .

President Trump's ratings are currently around 40%. Although Trump is not as conservative -- not as far-right -- as the U.S. aristocracy wants him to be, he is fascist ; just not enough to satisfy them (and their oppostion isn't because he's unpopular among the public; it's more the case that he's unpopular largely because their 'news'media concentrate on his bads, and distort his goods to appear bad -- e.g., suggesting that he's not sufficiently aggressive against Russia). His fascism on domestic affairs is honestly reported in the aristocracy's 'news'media, which appear to be doing all they can to get him replaced by his Vice President, Mike Pence. What's not reported by their media is the fascism of the U.S. aristocracy itself, and of their international agenda (global conquest). That's their secret, of which their public must be (and is) constantly kept ignorant. America's aristocracy has almost as much trouble contolling its domestic public as it has controlling its foreign vassals. Investigative historian Eric Zuesse is the author, most recently, of They're Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010 , and of CHRIST'S VENTRILOQUISTS: The Event that Created Christianity .

Recently from Author

America's Top Scientists Confirm: U.S. Goal Now Is to Conquer Russia Why Readers Shouldn't Trust Staff Reporters Why Sanders Supporters Should Vote for Trump

Fidelios Automata > , August 19, 2017 at 2:22 am GMT

Fascism is defined as a system that combines private monopolies and despotic government power. It is sometimes racist but not necessarily so. By the correct definition, every President since at least Herbert Hoover has been fascist to some degree.

exiled off mainstreet > , August 19, 2017 at 4:21 am GMT

One bit of silver lining in the deep-state propaganda effort to destabilise the Trump regime is the damage to the legitimacy of the yankee imperium it confers, making it easier for vassal states to begin to jump ship. The claims of extraterritorial power used for economic warfare might confer a similar benefit, since the erstwhile allies will want to escape the dominance of the yankee dollar to be able to escape the economic extortion practised by the yankee regime to achieve its control abroad.

WorkingClass > , August 19, 2017 at 4:43 am GMT

Good news – The beast is dying. Bad news – We Americans are in its belly.

Wally > , August 19, 2017 at 6:00 am GMT

"America's aristocracy" = lying Israel First Zionists. Why doesn't Eric Zuesse just say the truth? What is he afraid of?

Must read:

jilles dykstra > , August 19, 2017 at 6:31 am GMT

" America's aristocracy has almost as much trouble controlling its domestic public as it has controlling its foreign vassals. "

These foreign vassals had a cozy existence as long as the USA made it clear it wanted to control the world. Dutch minister of Foreign Affairs Ben Bot made this quite clear whan the Netherlands did not have a USA ambassador for three months or so, Ben Bot complained to the USA that there should be a USA ambassador.
He was not used to take decisions all by himself.

Right now Europe's queen Merkel has the same problem, unlike Obama Trump does not hold her hand.

Grandpa Charlie > , August 19, 2017 at 6:38 am GMT

Fidelios,

Yes, of course. I don't know about before Herbert Hoover, but certainly during the 50s, business -- monopolistic or oligopolistic (like the old Detroit auto industry) -- and government (including the MIC) were closely integrated. Such was, indeed, as aspect of progressivism. It was considered by most to be a good thing, or at least to be the natural and normal state of affairs. Certainly, the system back then included what amounted to price-fixing as a normal business practice.

On the other hand, the "despotic" thing is less clear. Some assert that since FDR was effectively a dictator during World War II, that therefore the Democratic Party represented despotism ever since FDR (or maybe ever since Wilson).

Having lived through that period of time, I have to say that I am not so sure about that: if it was despotism, it was a heavily democratic and beneficent despotism. However, it is evident that there was a fascist skein running through the entirety of USA's political history throughout the 20th Century.

jilles dykstra > , August 19, 2017 at 6:40 am GMT

@Fidelios Automata

Fascism originates from Mussolini's Italy. It was anti socialist and anti communist, it of course was pro Italian, Italy's great deeds in antiquity, the Roman empire, were celebrated.

One can see this as racist, but as Italy consisted of mostly Italians, it was not racist in the present meaning of the word at all. Italy was very hesitant in persecuting jews, for example. Hitler depised Mussolini, Mussolini was an ally that weakened Germany. Hitler and Mussolini agreed in their hatred of communism.

Calling Hitler a fascist just creates confusion. All discussions of what nowadays fascism is, our could mean, end like rivers in the desert.

Priss Factor > , August 19, 2017 at 7:52 am GMT

Come on

'Aristocracy' and 'fascist' are all weasel words. (I'm the only true fascist btw, and it's National Humanism, National Left, or Left-Right.)

US is an ethnogarchy, and that really matters. The Power rules, but the nature of the Power is shaped by the biases of the ruling ethnic group.

It is essentially ruled by Jewish Supremacists.

Now, if not for Jews, another group might have supreme power, and it might be problematic in its own way. BUT, the agenda would be different.

Suppose Chinese-Americans controlled much of media, finance, academia, deep state, and etc. They might be just as corrupt or more so than Jews, BUT their agenda would be different. They would not be hateful to Iran, Russia, Syria, or to Palestinians. And they won't care about Israel.

They would have their own biases and agendas, but they would still be different from Jewish obsessions.

Or suppose the top elites of the US were Poles. Now, US policy may be very anti-Russian BUT for reasons different from those of Jews.

So, we won't learn much by just throwing words like 'fascist' or 'aristocrat' around.

We have to be more specific. Hitler was 'fascist' and so was Rohm. But Hitler had Rohm wiped out.

Surely, a Zionist 'fascist' had different goals than an Iranian 'fascist'.

One might say the Old South African regime was 'fascist'. Well, today's piggish ANC is also 'fascist', if by 'fascist' we mean power-hungry tyrants. But black 'fascists' want something different from what white 'fascists' wanted.

It's like all football players are in football. But to understand what is going on, we have to know WHICH team they play for.

Jewish Elites don't just play for power. They play for Jewish power.

jacques sheete > , August 19, 2017 at 11:42 am GMT

Good summary of where we're at, but please don't call the ruling goons aristocrats. The word, "aristocrat," is derived from the Ancient Greek ἄριστος (áristos, "best"), and the ruling thugs in this country have never been the best at anything except lies, murder and theft.

I realize that calling them violent bloodthirsty sociopathic parasites is a mouthful, and that "plutacrats" doesn't have quite the appropriate sting, but perhaps it's more accurate.

Or maybe we should get into the habit of calling them the "ruling mafiosi." I'm open to suggestions.

"Goonocrats"?

Anon > , Disclaimer August 19, 2017 at 12:56 pm GMT

and that threatens those foreign aristocrats with encroachments against their own territory, whenever a vassal aristocracy resists the master-aristocracy's will.

They also -- through the joint action of Rating Agencies, the Anglosaxon media, the vassal vassal states' media, make national debt's yield spreads skyrocket. It's been the way to make entire governments tumble in Europe, as well as force ministers for economics to resign. After obeisance has been restored -- and an "ex Goldman Sachs man" put on the presidential/ministerial chair, usually -- investors magically find back their trust in the nation's economic stability, and yield spreads return to their usual level.

jacques sheete > , August 19, 2017 at 1:42 pm GMT

@jilles dykstra

These foreign vassals had a cozy existence

No doubt about it. That's how thugs rule; there are plenty of quivering sell outs to do the rulers' bidding. Look at the sickening standing ovations given to Netanyahoo by supposed "US" congresscreeps.

Jake > , August 19, 2017 at 1:46 pm GMT

@Fidelios Automata Abraham Lincoln's economic policy was to combine private monopolies with the Federal Government under a President like him: one who ordered the arrests of newspaper editors/publishers who opposed his policies and more 'despotic' goodies.

Joe Hide > , August 19, 2017 at 1:47 pm GMT

While the article favorably informs, and was written so as to engage the reader, it lacks reasonable solutions to its problems presented. One solution which I never read or hear about, is mandated MRI's, advanced technology, and evidence supported psychological testing of sitting and potential political candidates. The goal would be to publicly reveal traits of psychopathy, narcissism, insanity, etc. Of course, the most vocal opposition would come from those who intend to hide these traits. The greatest evidence for the likelyhood of this process working, is the immense effort those who would be revealed have historically put into hiding what they are.

SolontoCroesus > , August 19, 2017 at 3:04 pm GMT

@jacques sheete

"ruling mafiosi."

No way. How about Jewish terrorists ? Very few Italians in the ruling "aristocracy." Lots of Jews.

Jake > , August 19, 2017 at 3:05 pm GMT

Eric Zuesse is a nasty, hardcore leftist in the senses that matter most. Often, he reveals his Leftism to be based on his hatred of Christianity and his utter contempt for white Christians. But there is that dead clock being correct twice per day matter. In this article, Zuesse gets a good deal right.

First, he delineates the American Elites well. The USA forged by Abe Lincoln is not a real democracy, not a real republic. It is the worst kind of oligarchy: one based on love of money almost exclusively (because if a man does not love money well enough to be bribed, then he cannot be trusted by plutocrats) while proclaiming itself focused on helping all the little guys of the world overcome the power of the rich oppressors.

It is the Devil's game nearly perfected by the grand alliance of WASPs and Jews, with their Saudi hangers-on.

Second, it is fair to label America's Deep State fascist , Elite Fascist. And we should never forget that while Jews are no more than 3% of the American population, they now are at least 30% (my guess would be closer to 59%) of the most powerful Deep Staters. That means that per capita Jews easily are the fascist-inclined people in America.

The most guilty often bray the loudest at others in hope of getting them blamed and escaping punishment. And this most guilty group – Deep State Elites evolved from the original WASP-Jewish alliance against Catholics – is dead-set on making the majority of whites in the world serfs.

Third, the US 'weaponization of finance' seems to have been used against the Vatican to force Benedict XVI to resign so that Liberal Jesuit (sorry for the redundancy) Jorge Bergolgio could be made Pope. The Jesuits are far and away the most Leftist and gay part of the Catholic Church, and the American Deep State wanted a gay-loving, strongly pro-Jewish, strongly pro-Moslem 'immigrant' as Pope.

Fourth, that America's Leftists of every stripe, America's Neocons, and America's 'compassionate conservatives' all hate Putin is all you should need to know that Putin is far, far better for Russia's working class, Russia's non-Elites, than our Elites are for us.

jacques sheete > , August 19, 2017 at 3:36 pm GMT

@Brabantian Good comments.They apply to a few others around here as well, particularly this.

who mixes some truth with big lies

Priss Factor > , Website August 19, 2017 at 3:44 pm GMT

Charlottesville, Occupy Wall St And The Neoliberal Police State. Charlottesville was a Neoliberal ambush designed to crush the Alt Right once and for all. This story must be told.

https://altright.com/2017/08/19/charlottesville-occupy-wall-st-and-the-neoliberal-police-state/

jacques sheete > , August 19, 2017 at 3:46 pm GMT

@SolontoCroesus

"ruling mafiosi."
No way. How about Jewish terrorists ? Very few Italians in the ruling "aristocracy." Lots of Jews.

Very few Italians in the ruling "aristocracy."

Another common misconception is to associate the mafia with Italians mostly. The Italian mafiosi are pikers compared to the American ones of Eastern European descent. The real bosses are not the Italians.

Bugsy Siegel, Louis "Lepke" Buchalter, Longy Zwillman, Moe Dalitz, Meyer Lansky and many many others.

Even the Jewish Virtual Library admits to some of it.

http://www.jewishvirtuallibrary.org/jewish-gangsters-in-america

New York, Chicago, Las Vegas, LA, Miami, and many others all dominated by non-Italian mobsters, not to mention the US government.

[Jun 18, 2017] Amazon is monopolist which just became bigger

Jun 18, 2017 | economistsview.typepad.com

Fred C. Dobbs , June 17, 2017 at 01:59 AM

(Is this anything?)

The Amazon-Walmart Showdown That Explains the Modern
Economy https://nyti.ms/2sxhIkx via @UpshotNYT
NYT - Neil Irwin - June 16

With Amazon buying the high-end grocery chain Whole Foods, something retail analysts have known for years is now apparent to everyone: The online retailer is on a collision course with Walmart to try to be the predominant seller of pretty much everything you buy.

Each one is trying to become more like the other - Walmart by investing heavily in its technology, Amazon by opening physical bookstores and now buying physical supermarkets. But this is more than a battle between two business titans. Their rivalry sheds light on the shifting economics of nearly every major industry, replete with winner-take-all effects and huge advantages that accrue to the biggest and best-run organizations, to the detriment of upstarts and second-fiddle players.

That in turn has been a boon for consumers but also has more worrying implications for jobs, wages and inequality.

To understand this epic shift, you can look not just to the grocery business, but also to my closet, and to another retail acquisition announced Friday morning. ...

Walmart to Buy Bonobos, Men's Wear Company, for $310 Million https://nyti.ms/2tuGhf9

paine - , June 17, 2017 at 08:10 AM
When you lose confidence in your
existing biz you buy bizes
Fred C. Dobbs - , June 17, 2017 at 10:19 AM
It turns out Neil Irwin has
a thing for fine dress shirts.
pgl - , June 17, 2017 at 10:41 AM
WTF? Amazon has not lost confidence in creating a monopsony for buying and selling stuff. It just expanded their empire to groceries.
Paine - , June 17, 2017 at 12:35 PM
Cornering as many markets as possible
is a fools mission

The problem
corporations get to keep their cash flow

Review the nonsense oil companies got into when rolling in cash
Thanks to OPEC

pgl - , June 17, 2017 at 02:38 PM
WTF? You clearly never looked at Amazon's income statement.
JohnH - , June 17, 2017 at 04:28 PM
Amazon's business model is to become the dominant intermediary between producers and consumers.

Whole Foods positions it to ideally serve this role in every local market in America...one stop shopping, whether you're buying from China or from the local Chinatown.

When a company like Amazon is capturing market share, profits don't matter, as its stock price shows.

And Bezos ownerships of the Washington Post gives him a powerful bully pulpit against anyone with thoughts about anti-trust...that and his deep pockets.

cm - , June 17, 2017 at 12:38 PM
I wouldn't call it confidence. Any line or mode of business can be grown only to a certain size. At some point S-curve effects and scale complexity lead to diminishing returns, even if the business is managed as well as it can be. Also in some cases there may simply not be enough demand for the one or few things the company does.

Then companies have to branch out into other ways of business, typically outside their current activities. Sometimes there is synergy, sometimes not, and it's just about buying market and revenue with the imagination one can manage it better to a higher rate of profit.

Paine - , June 17, 2017 at 01:31 PM
Or

They can turn into passive cash cows

cm - , June 17, 2017 at 04:40 PM
Yes, though usually there is a growth mandate imposed by management or "investors".
Paine - , June 18, 2017 at 07:11 AM
Now we are in the heart of darkness

Growth mandates
Where growth is earnings
Or revenues or market shares or

And indeed too often
management v stock holders mandates overt or tacit obtain

Gibbon1 - , June 17, 2017 at 10:19 PM
Comment over brunch: Must be getting late in the cycle. Amazon shrewdly using it's internet valuation to buy tangible things.
Paine - , June 18, 2017 at 07:11 AM
True

[May 30, 2017] The tendency toward monopoly among data gathering disrupters

May 26, 2017 | economistsview.typepad.com/economistsview
point May 26, 2017 at 05:55 AM
https://promarket.org/big-data-competition/

An enlightening discussion on the tendency toward monopoly among data gathering disrupters. Especially important seems to be the possibility of fine-grained price discrimination. While saying not all price discrimination is considered negative by economists without studying it, it does seem discrimination should be taken as prima facie evidence of monopoly.

While the article talks about monopoly and capture in this area, let me reiterate that looking around the more regular corporate ecosystem there is increasing concentration among buyers and often among suppliers that seems not to attract anti-trust attention as long as the final consumer seems to be not harmed. "Not harmed" does not include missing out on falling prices no longer competed for.

[May 27, 2017] "Markets Today Are Radically Different Than What We Believe - We Have the Façade of Competition -

May 27, 2017 | promarket.org

Valletti, who is also a Professor of Economics at the Imperial College Business School and the University of Rome Tor Vergata, discussed the EC's investigation into the Facebook-WhatsApp merger during the panel. Facebook, he said, had "lied" to European regulators about its ability to absorb WhatsApp's user data, but the larger issue was market definition.

"Would the decision on the merger have changed had the Commission known that information at the time?" asked Valletti, who joined theEC in 2016. "At the time, the Commission defined the relevant market as non-search advertising. This is a huge market. In that ocean, even Facebook doesn't have a lot of market power. If instead the market definition had been, for instance, advertising on social networks, [it's]likely theywould have concluded that Facebook would have been dominant in that particular market, and that integrating that useful information from [WhatsApp] could have enhanced its market power." Valletti also stressedthe importance of having individual-level data when discussing issues like competition at the advertising market, and not just looking at market shares.

Pasquale and Taplin, meanwhile, criticized U.S. antitrust authorities, with Taplin saying that digital platforms have "done very well because they have a certain regulatory capture" and Pasquale remarkingthat "U.S. antitrust policy is rapidly becoming a pro-trust policy."

As an example of this "pro-trust" policy, Pasquale cited the FTC's lawsuit against online contact lens retailer 1-800 Contacts . 1-800 Contacts was sued by the FTC last yearfor having reached agreements with 14 other online contact lens sellers that they would not advertise to customers who had searched for 1-800 Contacts online."You would imagine that given the power of these [companies], and given the activity in Europe and many other nations, our enforcers would be extremely concerned about these platforms. They are-they're concerned about little companies hurting the platforms," he said.

The FTC, added Pasquale, had pursued the 1-800 Contacts case aggressively. "I'm not here to comment on the merits of this case, but I think that the choice of this enforcement target speaks volumes. What does it say? It says that if small firms arebeing exploited or hurt by a big digital behemoth, or think [they]are, don't try in any way to coordinate or maintain your independence. What you should do is all combine and merge and become a giant, say, contacts firm. In the media, they should all combine and merge and maybe all be bought by Comcast, so that then they can negotiate with Google in a way that they are relatively of the same size and power. That's the pro-trust message we're getting under current non-enforcement U.S. antitrust policy."

[Apr 28, 2017] Monopolization Amazon-style

Notable quotes:
"... Eros the bittersweet ..."
Apr 28, 2017 | www.nakedcapitalism.com
Carla , April 26, 2017 at 4:11 pm

You mean if Borders had become Barnes & Noble? Well, B&N is struggling, too.

Just like Walmart, Amazon's business model ELIMINATES the competition. In my view, every Amazon purchase is a rock thrown through the window of a local retailer, large or small. Personally, if I ever throw rocks, they're going to be aimed bigger and better targets than that.

Octopii , April 26, 2017 at 7:55 pm

B&N closed their Georgetown (DC) store a couple of years ago, IIRC right before the xmas season got started. It was an oasis on a side of town that would rather sell you a $500 pair of pants dotted with embroidered lobsters. The building was a nicely reclaimed three-floor warehouse space with coffee and lounging areas, and it had become a nice excuse to go into DC and hang out.

jrs , April 26, 2017 at 4:12 pm

because noone can afford what a new (dead tree) book costs. I get everything used for a few bucks a book.

RUKidding , April 26, 2017 at 4:14 pm

but but but used books have to start as new books sometime

Uahsenaa , April 26, 2017 at 5:34 pm

I'm not sure this is entirely true. Just as an example, a trade paperback I bought in 1998 for a cover price of $12.95 (Anne Carson's Eros the bittersweet ) now has a cover price of $13.95, only a dollar more. The BLS's CPI calculator says the book should cost $19.54 in today's dollars.

That doesn't strike me as unaffordable. It's possible that if I went out and bought a copy of the book now, the printing might be worse, or the paper of a lower quality, but I cannot imagine it being much worse than the copy I already own.

Tertium Squid , April 26, 2017 at 7:31 pm

Use interlibrary loan and never buy another book at all.

[Apr 06, 2017] Inequality and the Lake Wobegon Effect

Apr 06, 2017 | economistsview.typepad.com
"Our Efforts to Deal With Tech Firms' Market Dominance in the U.S. Have Been an Abject Failure" : ...Q: The five largest internet and tech companies-Apple, Google, Amazon, Facebook, and Microsoft-have outstanding market share in their markets. Are current antitrust policies and theories able to deal with the potential problems that arise from the dominant positions of these companies and the vast data they collect on users?
Our efforts to deal with the problems in the United States have been an abject failure. ...I might note that Facebook's dominant position in the market is due in part to its role as an innovator and partly to "network externalities"... Microsoft's dominant position is also attributable in part to network externalities...
But the antitrust agencies have not taken sufficient measures to remedy abuses of this advantage.
Q: Is there a connection between the growing inequality in the U.S. and concentration, dominant firms, and winner-take-all markets?
I believe there is. The evidence of rising wealth inequality, especially through the work of Piketty and co-authors, is compelling. Less well known is evidence compiled at M.I.T. of strongly rising inequality of compensation, especially at the top executive levels. The nexus has not to my knowledge been fully articulated.
Here's my hypothesis: In recent decades, most publicly-traded corporations, at least in the United States, have embraced executive compensation consultants to advise the board of directors on executive compensation levels. Those consultants provide data on compensation averages and distributions for companies in peer industries. But then the Lake Wobegon effect goes to work. The boards say, "Surely, our guy isn't below average," to the average reported by the compensation consultants becomes the minimum standard for compensation. If each top executive receives at least the minimum reported pay and often more, the average rises steadily.
Indeed, and here I tread on weaker ground, those compensation costs are built into the costs considered by companies in their product pricing decisions (in a kind of rent-seeking model), and so price levels rise to accommodate rising compensation. I might note that this dynamic applies not only for chief executives, but trickles down to embrace most of companies' management personnel. ...
JohnH , March 22, 2017 at 11:04 AM
As I said a couple days ago, "Good to see economists finally addressing issues that John Kenneth Galbraith raised 50 years ago...but were largely ignored since then by 'librul' economists who didn't want to cross the folks who had funded their academic chairs."

For the past 40 years, corporate strategic planning has been all about market dominance. Back in the late 1970s Harvard Business School professor Michael Porter was all the rage along with the Boston Consulting Group, Mitt Romney's Bain Capital, and GE's Jack Welch. the mantra was that if you couldn't dominate a market, best get out. Weaker players were tolerated mostly to allay anti-trust intrusion.

Meanwhile, Republicans tacitly supported it, Democrats turned a blind eye, and 'librul' economists were off doing whatever they do.

Maximilian , March 22, 2017 at 12:44 PM
Evidence in support of Sherer's hypothesis can be found in Tom DiPrete et al's 2010 article in AJS: Compensation Benchmarking, Leapfrogs, and the Surge in Executive Pay. They write: "Scholars frequently argue whether the sharp rise in chief executive officer (CEO) pay in recent years is "efficient" or is a consequence of "rent extraction" because of the failure of corporate governance in individual firms. This article argues that governance failure must be conceptualized at the market rather than the firm level because excessive pay increases for even relatively few CEOs a year spread to other firms through the cognitively and rhetorically constructed compensation networks of "peer groups," which are used in the benchmarking process to negotiate the compensation of CEOs. Counterfactual simulation based on Standard and Poor's ExecuComp data demonstrates that the effects of CEO "leapfrogging" potentially explain a considerable fraction of the overall upward movement of executive compensation since the early 1990s."
https://academiccommons.columbia.edu/catalog/ac%3A139538
point , March 22, 2017 at 01:08 PM
The story told is nearly exactly the one Warren Buffett has been telling since 95, maybe earlier, so I do not know who was prior.

[Mar 22, 2017] Market power in the U.S. economy today

Notable quotes:
"... Labor market anyone -- where market power also translates to political power -- if labor has decent market power? Toothless (as in no penalty for crushing unions for 80 years) institutions are the reality. ..."
"... Do you guys ever talk about anything other but what the other guys talk about? ..."
Mar 22, 2017 | economistsview.typepad.com
Overview The U.S. economy has a "market power" problem, notwithstanding our strong and extensive antitrust institutions. The surprising conjunction of the exercise of market power with well-established antitrust norms, precedents, and enforcement institutions is the central paradox of U.S. competition policy today. Market power in the U.S. economy today : As this policy brief explains, the harms from the exercise of firms' market power may extend beyond individual markets affected to include slower overall economic growth and increased economic inequality. The implications for future economic productivity and welfare are troubling, but before detailing these consequences, it is necessary to understand why market power is a major issue despite well-established antitrust enforcement institutions and legal precedents. ...

anne : , March 20, 2017 at 11:34 AM

https://promarket.org/convincing-evidence-concentration-rising/

March 19, 2017

"There Is Convincing Evidence That Concentration Has Been Rising"
Interview of John E. Kwoka

mulp : , March 20, 2017 at 12:26 PM
Five Walmarts competing with each other would not raise worker wages above the wages Walmart pays. In fact, it would lower wages.

I remember Milton Friedman's Newsweek columns circa 1970 which are deep behind a paywall so I can't even find a date and title.

I remember one where he argued for utility deregulation and introduction of competition to lower prices of electricity and telephone service.

He argued that the PUC was captured by the utility that by regulation made a business profit only on ROIC plus a small rent on operating costs. By regulation, capital was always depreciating, thus a power plant or the wires and poles distributing power were constantly falling in value. The depreciation was an expense plus the labor costs which determined the base rate, with a 8-10% return on capital, the original labor costs of the power plant and wires and poles minus depreciation and a rent on operating labor.

So, how does a utility earn higher profit?

It must pay workers with capital to build more assets, more power plants, more and better power wires and poles. And it must pay more to workers to operate the utility.

In other words, profit increased the more paid to labor. The PUC had to approve these labor costs as prudent, but paying prevailing union wages was prudent. Thus, the utility could meet the demands of unions for higher wages, for more people on the job.

Worse, the PUC would get hammered with complaints if the utility was unreliable, so most regulators approved utility requests to build redundant power plants and build redundant power lines, plus hire redundant workers who could be put to work recovering from storm damage.

Thus, in Milton Friedman's view, government sanctioning a monopoly resulted in too much, too reliable service that paid too many workers too much money at the expense of all customers, especially customers who did not need the reliability.

Worse, the utilities were constantly trying to get customers to buy more to justify building more capital assets to increase profits.

And even worse, too many workers were paid too much which resulted in too much consumption, thus too much production, and that created too much demand for labor, driving up wages and increasing the number of workers, driving up I incomes and consumption.

He noted that the rush to build nuclear power plants was driven by their high capital costs and nearly purely utility labor operating costs - the utility did not pay for coal for which it got no business profit.

Thus his efforts to deregulate utilities: cutting labor costs, cutting business profits. He argued for fewer workers operating utilities and building capital assets, with economic profits driving investment decisions. Ie, a 20% profit would drive more investment, but a 5% profit would drive layoffs and cuts in reliability. Any individual who needed reliability would simply pay more to get higher reliability.

And as utilities were deregulated as he called or as best as it could be done, we have seen job losses, pay cuts, higher unreliability, sometimes bankruptcy, and other times extremely high profits, often both at the same time. When PURPA was implemented by States and utilities forced to sell power generation, then nuclear power plants were sold below the book capital cost, by these forced sales were deemed takings, so the losses from sales became stranded costs added to the rate base as depreciation. Meanwhile, as investment in new power plants fell, nuclear power plants became very profitable as market prices rose. So, the utility was going bankrupt after forced to sell assets while the assets were generating 20% or more on purchase price returns, but less than 10% on construction cost.

Friedman made the same argument for passenger airlines. Airlines paid high wages and had large cabin crews and most were profitable enough to work hard to increase customer demand. They got approval to offer low fares at the last minute to students and other classes of non-customers. Thanks to regulation. Then deregulation happened, and every airline but one went bankrupt, service quality declined, worker wages slashed, crews in the air and on the ground cut.

Friedman argued that everyone benefits from competition and is harmed by monopoly, especially regulated monopoly, because too many workers are paid too much, and those workers consume too much, and everyone is forced to pay too much to live.

Thus the creation of free lunch economics: Driving down prices but increasing profits will make everyone better off as those evil workers get less pay, costing consumers much less.

Workers are not valued consumers. Valued consumers are not workers.

Milton Friedman was not a worker, but a valued intellectual and consumer.

pgl -> mulp... , March 20, 2017 at 01:09 PM
"Five Walmarts competing with each other would not raise worker wages above the wages Walmart pays. In fact, it would lower wages."

So you accept the Economism view of labor markets where monopsony power does not exist? Sorry but the labor market evidence questions this perfectly competitive view of labor markets.

JohnH : , March 20, 2017 at 01:09 PM
Good to see economists finally addressing issues that John Kenneth Galbraith raised 50 years ago...but were largely ignored since then by 'librul' economists who didn't want to cross the folks who had funded their academic chairs.
pgl -> JohnH... , March 20, 2017 at 01:10 PM
So John Kenneth Galbraith was a right winger? Could you please stop this silly parade that liberal economists have never talked about what they often talk about. It is beyond pointless.
JohnH -> pgl... , March 20, 2017 at 01:45 PM
Oh, please. 'Librul' economists have mostly ignored monopoly and oligopoly for years. And Galbraith was definitely NOT a conservative, but academic economists largely ignored his valuable contributions.

Pay attention!

JohnH -> JohnH... , March 20, 2017 at 01:52 PM
As a measure of 'librul' concern about monopoly and oligopoly, Krugman talks about this even less than he talks about inequality...less than twice a year.
JohnH -> pgl... , March 20, 2017 at 07:05 PM
Market concentration, monopoly, and oligopoly aren't even listed as categories at economistsview!

Yet pgl tries to assure us that 'librul' economists take this issue seriously...guffaw, guffaw.

Flat Eric -> JohnH... , March 21, 2017 at 06:58 AM
Nor are labor economics, trade or public economics. So what?

Competition economics is still a huge and very active topic within the discipline. Indeed, the last but one Nobel winner, Jean Tirole, works extensively in this area.

Denis Drew : , March 20, 2017 at 02:08 PM
"Overview The U.S. economy has a "market power" problem, notwithstanding our strong and extensive antitrust institutions."

Labor market anyone -- where market power also translates to political power -- if labor has decent market power? Toothless (as in no penalty for crushing unions for 80 years) institutions are the reality.

Do you guys ever talk about anything other but what the other guys talk about?

point : , March 20, 2017 at 05:54 PM
"The U.S. economy has a "market power" problem, notwithstanding our strong and extensive antitrust institutions. The surprising conjunction of the exercise of market power with well-established antitrust norms, precedents, and enforcement institutions is the central paradox of U.S. competition policy today."

Left off the subsequent list of possible explanations is that the first above statement just may be false.

point -> point... , March 20, 2017 at 09:46 PM
Thinking especially about the "notwithstanding our strong and extensive antitrust institutions" part.

[Dec 26, 2016] AT T To Cough Up $88 Million For Cramming Mobile Customer Bills

Notable quotes:
"... The matter with ATT was originally made public in 2014 and also involved two companies that actually applied the unauthorized charges, Tatto and Acquinity. ..."
Dec 26, 2016 | news.slashdot.org
(networkworld.com) 37

Posted by BeauHD on Thursday December 08, 2016 @06:25PM from the money-back-guaranteed dept. An anonymous reader quotes a report from Network World:

Some 2.7 million ATT customers will share $88 million in compensation for having had unauthorized third-party charges added to their mobile bills , the Federal Trade Commission announced this morning. The latest shot in the federal government's years-long battle against such abuses, these refunds will represent the most money ever recouped by victims of what is known as "mobile cramming," according to the FTC.

From an FTC press release :

"Through the FTC's refund program, nearly 2.5 million current ATT customers will receive a credit on their bill within the next 75 days, and more than 300,000 former customers will receive a check. The average refund amount is $31. [...] According to the FTC's complaint, ATT placed unauthorized third-party charges on its customers' phone bills, usually in amounts of $9.99 per month, for ringtones and text message subscriptions containing love tips, horoscopes, and 'fun facts.' The FTC alleged that ATT kept at least 35 percent of the charges it imposed on its customers."

The matter with ATT was originally made public in 2014 and also involved two companies that actually applied the unauthorized charges, Tatto and Acquinity.

[Sep 15, 2016] The globalization of the technocratic paradigm

Jun 23, 2015 | EconoSpeak

From Encyclical Letter Laudato Si' of the Holy Father Francis, On Care For Our Common Home:

The basic problem goes even deeper: it is the way that humanity has taken up technology and its development according to an undifferentiated and one-dimensional paradigm. This paradigm exalts the concept of a subject who, using logical and rational procedures, progressively approaches and gains control over an external object. This subject makes every effort to establish the scientific and experimental method, which in itself is already a technique of possession, mastery and transformation. It is as if the subject were to find itself in the presence of something formless, completely open to manipulation. Men and women have constantly intervened in nature, but for a long time this meant being in tune with and respecting the possibilities offered by the things themselves. It was a matter of receiving what nature itself allowed, as if from its own hand. Now, by contrast, we are the ones to lay our hands on things, attempting to extract everything possible from them while frequently ignoring or forgetting the reality in front of us. Human beings and material objects no longer extend a friendly hand to one another; the relationship has become confrontational. This has made it easy to accept the idea of infinite or unlimited growth, which proves so attractive to economists, financiers and experts in technology. It is based on the lie that there is an infinite supply of the earth's goods, and this leads to the planet being squeezed dry beyond every limit. It is the false notion that "an infinite quantity of energy and resources are available, that it is possible to renew them quickly, and that the negative effects of the exploitation of the natural order can be easily absorbed"

"The technocratic paradigm also tends to dominate economic and political life. The economy accepts every advance in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the real economy. The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons of environmental deterioration. Some circles maintain that current economics and technology will solve all environmental problems, and argue, in popular and non-technical terms, that the problems of global hunger and poverty will be resolved simply by market growth. They are less concerned with certain economic theories which today scarcely anybody dares defend, than with their actual operation in the functioning of the economy. They may not affirm such theories with words, but nonetheless support them with their deeds by showing no interest in more balanced levels of production, a better distribution of wealth, concern for the environment and the rights of future generations. Their behavior shows that for them maximizing profits is enough. Yet by itself the market cannot guarantee integral human development and social inclusion. At the same time, we have "a sort of 'superdevelopment' of a wasteful and consumerist kind which forms an unacceptable contrast with the ongoing situations of dehumanizing deprivation", while we are all too slow in developing economic institutions and social initiatives which can give the poor regular access to basic resources. We fail to see the deepest roots of our present failures, which have to do with the direction, goals, meaning and social implications of technological and economic growth."

GLOBALIZATION and 9-11

If you look back on past American wars, like the Spanish-American war in Cuba that also seized the Phillipines, that was a war for Corporate Globalization. President McKinley even said so. It as a war to "open up markets", including China, which was closed to American business. So were wars and many occupations in Central and South America, from the earliest beginnings of America on through today. Revolutionary movements of peasants and campesinos would sometimes try to overthrow the mostly-Spanish European oligarchs and their dictators, and American would come in and repress the peasants, or in the case of a truly democratic government that supported the will of their people, they would overthrow or kill their leaders or actually send in Marines. This is what Marine Commandant General Smedley Butler was explaining, when he wrote "I was a gangster for capitalism" and "War is a Racket".

World Wars One and Two also had their geo-political and geo-strategic factors for America, in terms of dominating global trade with fractured Europe, and beating back the British Empire. Hitler beat back BOTH Britain and France, as well as Belgium and ... well ... about ALL of Europe, some of America's biggest imperial competitors. Hitler and Mussolini also crushed communism and labor activism growing in popularity in Germany and France, and Hitler nearly destroyed the newly founded USSR. (Stalin signed a non-aggression pact with Hitler only after Britain refused to sign a mutual defense pact with Stalin, and some in British govt and Intell were covertly helping the Nazis. Wall Street heavily helped the Nazis.)

Even the invasion of North America and annihilating the native population was to find new sources of raw capital for European corporations, and the American Revolution was to get rid of unfair taxes and control over American corporations by what was being seen as a foreign power, Britain.

By the way, it's not about "liberals hate corporations". Every corporation is a quasi-government entity. It's not simply a "large company". Someone could incorporate a solo lemonade stand.

The point is, it's a contract or "charter" that a company takes, via a relationship and agreements with government, for protection against personal liability, elimination or limitation of personal responsibility. This relationship is defined by mountains of Corporate Law precedents and rules. There is really no such thing as a "private corporation". The Corporation is a legal tool for growth of capitalism, but "no legal responsibility" is dangerous for society, because "society" is excluded.

Yet at the same time, every US corporation is considered a "person" due "equal protection" under the the 14th Amendment in the sense of "civil liberties" -- these legal instruments can claim all the protections that the Bill of Rights guarantees to humans, but this "equal protection" gives corporations far more power than human beings. "Treaties" and "Agreements" have been in process for many years, setting up non-democratic institutions that manage global corporatism. They place the "divine" right to profits over any rights of human beings. We've been trumped. So getting back on track ...

To summarize a long point, in the Military-Industrial-Finance-Corporate-Media-Security-Infotainment complex, the heads of many of the largest corporations and conglomerates include former military intelligence officers, bankers, and former/future govt appointees. Most govt. appointees are not lifetime politicians, they're corporate officers, chiefs, lawyers, bankers. The Central Intelligence Agency, which has never been about collecting information but 80% covert ops, according to retired agents, it's directors are typically Wall Street bankers and lawyers, not military intelligence.

Most people know that Pepsico owned both Taco Bell and KFC, and many more companies.
Most people have heard about "holding companies" and "corporate shells", giant conglomerate umbrellas, like Altria Group, previously known as Philip-Morris (Marlboro, other tobacco), that has owned Miller Beer, Kraft Foods, Nabisco, and more. But not just smokes and food.
Philip-Morris Directors consist of a former Secretary of Defense and Wall Street bankers. Read some of these biographies: Govt positions, Airline deregulation, Aerospace, SALT II treaty, Brookings Institution, Neuro medicine, UK politics, Fox Entertainment, Travellers, US Airways Group, Lehman Brothers Private Equity, Federal Reserve, U.S. Treasury, Overseas Private Investment Corporation (govt), Marriott International, National Geographic Society, Citigroup, New York Stock Exchange, Lazard Frères & Co. LLC (Wall St), etc.

Get it? This financial shit is interlocked and layered, with subsidiaries and shells and cross-linking. Corporate CEOs, lawyers, and bankers run the government. Govt officials support multi-national corporations. It's a revolving door.

The Boards of Directors of most major Fortune 500 companies are cross-linked with other companies, often with competitors.

Since the average Corporate Director sits on 14 Boards, these boards include people from across Industry, Media, Food, Medicine, Military Contractors, and more. This is called "interlocking Boards of Directorate", a financial and control infrastructure. Approximately the top 1% (or less) of America basically owns or controls the entire country, 99% of corporate property, including land. This is simply an economic fact.

This is how the world is really organized. The White House, Congress, Cabinet, Departments, Judiciary, CIA is just one more set of players.

Then there's high military intelligence, what some call "Shadow Govt".

As a matter of fact, most CIA directors do not come from a military background, but rather Wall Street lawyers and bankers.

As Thomas Friedman said, "The hidden hand of the market will never work without a hidden fist" of the U.S. military. (Why is that? Why does buying and selling and free trade require armed force? Isn't it just like shopping? Doesn't everyone want to make money? Who brandishes heavy weapons to go shopping ... except for a robbery?)

"What we in America call terrorists are really groups of people that reject the international system..." - Henry Kissinger

Charles Townsend, former CEO of Avis, wrote a critical guide for successful corporations called "Up the Organization". He mentioned that a mere 5000 people control the "commanding heights" of the US economy, and that this ruling elite "regard this country as their own whore house and they treat each president as their private towel boy." So there ya go.

Neoliberalism, Anomie, and Interpersonal Violence Normlessness Leads to Criminality " Sociology Lens

Increasingly, there appears to be a connection between neoliberalism and the development of anomie. Such an association is unsurprising considering that neoliberalism encourages individuals to achieve ever greater success even though such a goal is unrealistic. In response to being blocked from realizing their never-ending aspirations, Merton (1968) argues that people in success-driven societies will feel deprived and frustrated as a divide forms between idealistic ambitions and factual reality. While such a divide has traditionally been the widest in developed capitalist states like the U.S., Passas (2000) contends that the growth of neoliberalism has exacerbated this problem in countries throughout the world. As a result, anomie, or the "withdrawal of allegiance from conventional norms and a weakening of these norms' guiding power on behavior" has increased on a global scale (Passas 2000:20). Oozing with the anomie brought about by constant strain, neoliberalism can intensify the occurrence of violence as frustrated people struggle to live and to succeed in an unequal society. In response to this idea, it appears that as neoliberalism becomes more prominent in a country, it can be expected that anomie and, as a result, interpersonal violence within that country will increase.

When it comes to success-driven societies, both Durkheim (1951[1897]) and Merton (1968) argue that such environments can lead to the development of anomie as a result of the imbalance between societal expectations and realistic opportunities. Both scholars agree that the occurrence of means-ends discrepancies can cause to people to feel highly strained and frustrated. And, as people become increasingly aware of power and economic asymmetries, especially as globalization and neoliberalism become more prominent in a country, this sense of strain and frustration can grow. In response, some may choose to either partially or fully disregard previously internalized societal norms that no longer seem useful. As Passas (2000) explains, this means that conventional norms may lose much of their meaning and/or that they may lose their ability to guide pro-social behavior. Such a loss of norms results in anomie, or normlessness. Unfortunately, individuals dealing with anomie typically have limited options when it comes to turning to the state for help. This is because neoliberal policies have often already done away with many of the welfare programs, forms of assistance, and safety nets that had previously kept individuals afloat (Passas 2000). The loss of the state as form of relief can then further encourage the evolvement of anomie within a society.

Considering that anomie results in the full or partial loss of social norms, it is not surprising that anomie can lead to deviance. As Passas (2000) points out, normlessness almost necessitates deviance when legitimate means to success are blocked. Individuals facing such a reality feel less of a need to follow previously internalized social norms and more of a need to engage in deviant activities in order to reach their goals. This desire to succeed at all costs paired with a disregard for social rules can easily result in violence. As an example of this idea, Fullilove et al. (1998) found that the occurrence of a violence epidemic in Washington Heights, a neighborhood in New York City, was the result of growing anomie as the neighborhood disintegrated in the midst of social disarray. Braithwaite et al. (2010) further contend that recent violence in Indonesia was the result of societal-level anomie. Other studies (e.g., Messner and Rosenfeld 1997; Savolainen 2000), too, have indicated that there exists a strong relationship between anomie and violence. These findings are not counterintuitive. It makes sense that when people are feeling strained that their frustration (and the loss of previously held norms against deviance) can transform into acts of violence.

Source: Microsoft

In an effort to more clearly articulate this overall premise, consider the case of Russia. As explained by Passas (2000), Russia began to slowly embrace neoliberal policies in the 1980s. By the mid-1990s, these policies had resulted in lifting import and export tariffs, liberalizing prices, removing domestic trade restrictions, minimizing the role of government, and privatizing public property. Hungry for freedom, the Russian populace lapped up these neoliberal ideas as consumptionist ideals replaced previously held socialist goals. Unsurprisingly, this zealous transition from socialism to capitalism brought about many consequences including severe and growing social inequality. Unable to overcome structural obstacles and unable to attain success, Passas writes that strain and frustration resulted in many Russians becoming increasingly anomic. Simultaneously, deviance began to increase as old social norms fell out of favor and the Russian government lost much of its autonomy. In response, rising anomie and deviance resulted in a criminal explosion. Since the collapse of the USSR in 1991, already high levels of homicide have increased dramatically, making Russia one of the world's hotspots for murder (Pridemore 2002). Chervyakov et al. (2009) further note that, unlike in the USSR, murders in Russia are now much more likely to involve aggravating circumstances like rape or robbery. Bringing these findings together, Collier's (2005:111) research suggests that violence in Russia after the transition to capitalism "resulted from inequitable distribution of wealth, rapid privatization, [and] a fall in real income" as well as the loss of the social safety net and an increase in organized crime. Altogether, Russia is a prime example of how the strain and frustration induced by neoliberalism can lead to anomie and, eventually, to violence.

By briefly evaluating the case of Russia, it is hopefully clearer how neoliberalism can directly contribute to anomie and indirectly contribute to violence. By creating incredible amounts of stress for those blocked by society's goals (Durkheim 1957[1897]; Merton 1968), neoliberalism increases the amount of anomie found within a society. This anomie, research has indicated, can then manifest itself in frustration, deviance, and violence (Messner and Rosenfeld 1997; Fullilove et al. 1998; Savolainen 2000; Braithwaite et al. 2010) just as it has done in Russia (Pridemore 2002; Collier 2005; Chervyakov et al. 2009). Without a doubt, the occurrence of violence furthers the development of anomie in a society. This thus suggests that there exists a non-recursive relationship between anomie and violence in that each variable can exacerbate the negative effects of the other. In an effort to dismantle this relationship, Fullilove et al. (1998) argue that communities need to be improved from within while having structural problems addressed from the outside. Doing so, of course, would require very anti-neoliberal policies which, realistically, seem very unlikely to occur in the near future.

For further reading:

Braithwaite, John. 2010. Anomie and Violence: Non-Truth and Reconciliation in Indonesian Peacebuilding. Canberra, Australia: The Australian National University.

Chervyakov, Valeriy V., Vladimir M. Shkolnikov, William Alex Pridemore, and Martin McKee. 2002. "The Changing Nature of Murder in Russia." Social Science and Medicine 55(10):1713-1724.

Collier, Paul. 2005. Understanding Civil War: Europe, Central Asia, and Other Regions. Washington, DC: The International Bank for Reconstruction and Development/The World Bank.

Durkheim, Emile. 1951 [1897]. Suicide. New York: Free Press.

Fullilove, Mindy Thompson, Veronique Heon, Walkiria Jimenez, Caroline Parsons, Lesley L. Green, and Robert E. Fullilove. 1998. "Injury and Anomie: Effects of Violence on an Inner-City Community." American Journal of Public Health 88(6):924-927.

Merton, Robert K. 1968. Social Theory and Social Structure. New York: The Free Press.

Messner, Steven F., and Richard Rosenfeld. 1997. "Political Restraint of the Market and Levels of Criminal Homicide: A Cross-National Application of Institutional-Anomie Theory." Social Forces 75(4):1393-1416.

Passas, Nikos. 2000. "Global Anomie, Dysnomie, and Economic Crime: Hidden Consequences of Neoliberalism and Globalization in Russia and Around the World." Social Justice 27(2):16-44.

Pridemore, William Alex. 2002. "Vodka and Violence: Alcohol Consumption and Homicide Rates in Russia." American Journal of Public Health 92(12):1921-1930.

Savolainen, Jukka. 2000. "Inequality, Welfare State, and Homicide: F

Crisis, Populist Neoliberalism and the Limits to Democracy in Mexico Global Research

Organized Crime, Militarization and Populist Neoliberalism in Mexico

Recently, the outreach of organized crime linked to drug cartels has spread throughout the country, even to Mexico's Southern border with Guatemala. Right after the dubious and contested 2006 presidential election, Calderón tried to gain legitimacy by imposing an iron fist policy on organized crime through mobilizing the military. Since 2006, fifty thousand federal soldiers have been deployed throughout the country. This was partly seen by many sectors of the population as a positive step toward decreasing the levels of violence, particularly in states where it is widely believed that organized crime has infiltrated police forces and local institutions. This has become Calderón's strategy to gain popular support in order to increase his bargaining power vis-à-vis the opposition while controlling organized crime to maintain the political stability necessary for the functioning of markets.

The PRI claims that political stability was ensured under its presidential administrations and blames the PAN for the rising levels of violence in the country. At the same time, the PRI is evoking rosy political images of the past, which recall its clientelistic practices through which the party used to allocate a small proportion of illegally appropriated funds to subordinated classes in order to maintain the legitimacy of the party outside democratic mechanisms. These practices have been maintained at the state and local level, resulting in a growing support for the PRI at the local level from those sectors of the population increasingly marginalized in the past years by neoliberal policies.

Both the PAN and the PRI have been carrying out campaigns of fear to stay in power. On the one hand, Calderón is trying to increase his party's strength by stressing that his policy of militarization is the only way to fight organized crime and disrupt alliances between drug cartels, police forces and some state and local authorities. And that this policy can only be maintained if the PAN wins the 2012 presidential election. On the other hand, the PRI is stressing that voting for the PAN has only increased marginalization and violence. Thus, the PRI depicts itself as the only political option for the 2012 presidential election. The disillusionment with the PAN over economic hardship and growing violence can be seen in the 2009 mid-term elections for seats in the lower house, six state governments and about 500 mayors in 11 states – the PRI won 36.7 percent of the seats in the lower legislative house as well as most state and local posts. Thus both parties are employing populist strategies to gain popular support around issues of violence and insecurity. At the same time, they both have demonstrated their commitment to domestic austerity, on the one hand, and discretionary government spending, on the other, to empower those groups that can maintain the neoliberal agenda.

Austerity from Within: the 2010 Mexican Budget

The 2010 Budget Initiative proposed by Calderón contradicts his previous rhetoric regarding the counter-cyclical response to the crisis through more government spending and less taxes for the majority of the population. The initiative he sent to Congress included a 0.5 percent of the GDP deficit and a two percent rise in the goods and service tax, from 15 to 17 percent. While Calderón argued that this two percent would be channeled to social programs to fight poverty, the aim of expanding regressive taxation was in fact to increase state funding to prevent a credit-rating downgrade of the country's debt. Interestingly enough, the measures contained in this initiative differ from some of the prescribed policies of the World Bank, International Monetary Fund and the Organization of Economic Cooperation and Development, which suggested avoiding regressive taxation and a temporary deficit of 2.5 percent of the GDP to encourage state spending.

When the initiative was first sent to Congress, the PRI and the centre-left Party of the Democratic Revolution (PRD) opposed the Executive's proposal. As negotiations between the president's party and the PRI progressed, a new consensus around the budget was evident. The budget passed by Congress kept a one percent increase in regressive taxation and included a request to the Executive to elaborate an austerity program by March 15, 2010.

The alliance between the PRI and the PAN and the failure of the PRD to oppose the budget shows the limits of electoral liberalization, a liberalization that has allowed the PRI and the PAN to monopolize power in the Legislative and Executive branch in order to favour particular forces within their parties. In this alliance, the PRI, which holds the majority of seats in the Lower House, supported an expansion of regressive taxation as long as the PAN agreed to channel more funds to state governments, which are mostly controlled by the PRI, as well as to remove transparency and accountability mechanisms on state and municipal spending and cut federal social programs. In fact, the states that received large benefits from this budget were the Estado de México, whose governor is considered the main contender for the presidential candidacy of the PRI in 2012, and Oaxaca, whose governor was found guilty of human rights violations by the Mexican Supreme Court. This budget allows PRI governors to use public money in a discretionary way to gain support in their own states, increase their clientelistic networks and enhance the party's position in the forthcoming 2012 presidential election. Both the PRI and the PAN, along with other parties such as Convergencia and the Green Party and some factions of the PRD, also agreed to the creation of an austerity program provided that the big budgets of the political parties and the Legislative, which include personal expenses and private medical insurance for legislators, would not be decreased.

The budget negotiations reveal two limits to the democratization of economic decision-making in the country. First, Congress' request for an austerity program shows that austerity has not necessarily been imposed from abroad, but rather it is Mexico's domestic balance of forces, particularly its 'representative institutions,' that have internalized capitalist discipline within the country. Second, the 2010 budget negotiations illustrate how societal demands have been isolated from economic decision-making and partisan politics. The marginalization of popular demands only benefits a small group, particularly financial capital, whose investment in government debt and the Mexican peso is guaranteed by the funding available in next year's public budget.

It might seem puzzling that Calderón and the PAN legislators decided to negotiate a budget with the PRI that increases the latter's authoritarian power at the state level, at a high political cost for the PAN in the upcoming 2012 presidential election. One reason for this generous gift to the PRI was that the austerity budget could not pass without the votes of PRI legislators. Also, Calderón needs the PRI support in the Senate for the confirmation of Agustín Carstens as the new president of the central bank, who is one of Calderón's closer collaborators and orchestrator of the new regressive tax, in order to increase the president's hold over economic policy. The other reason is that both parties agree on the continuation of the neoliberal agenda and the exclusion of progressive forces from the political realm. And both are being pressured to move forward in this direction by the big business associations. The two parties, with some exceptions, have supported the sudden closure of the public electricity company, Luz y Fuerza del Centro, and the attack on the Mexican Electrical Workers Union (SME) while protecting other unions that support the current neoliberal agenda such as the Teachers' National Union (SNTE). The PAN might even be willing to allow the PRI to enhance its power as long as it leaves the neoliberal agenda intact and does not allow progressive social forces to participate in policy-making. While there seems to be a consensus between the PRI and the PAN regarding the neoliberal trajectory of the country, such consensus remains fragile because of internal conflict within each of the parties of Mexican neoliberalism.

The Fragmentation of the Mexican Neoliberal Political Project: Spaces for Resistance

Mexico's current conjuncture has produced growing tensions among the supporters of the neoliberal project itself. While previous administrations constructed a consensus around the neoliberal agenda, disagreement on these policies have become evident during Calderón's presidency. The 2010 budget disrupted the PAN's unity when PAN Senators, in particular, resented Calderón's pressure to move forward on the tax increases and grant more leeway for state governors' discretionary spending. Also, the close relations between Calderón and the business sector have become strained after the 2010 budget negotiations. In the most recent Mexican Business Summit in Monterrey, some of the largest Mexican corporations not only expressed their disapproval of Calderón's budget but also of the "government-promoted model of the past 25 years, which has only generated slow rates of growth and low levels of employment."

The tensions between big business and the PAN as well as within both the PAN and the PRD have combined with popular discontent to open spaces of resistance for opposition forces at the local, state and national level. However, divisions within the Mexican Left need to be overcome in order to take advantage of these spaces. The electoralist focus and the internal conflicts within the PRD have not allowed this party to forge close alliances with labour and grassroots organizations at the national level. Also, there are regional differences regarding the issues that are considered relevant to an alternative agenda to neoliberalism. For instance, people in Northern Mexico, including progressive social organizations, which are mostly concerned with drug-related violence and maquiladora issues, might not necessarily identify themselves with the struggles in Central and Southern Mexico such as the mobilization of the Mexican Electrical Workers and the Zapatista movement. In general, it is necessary to find commonalities among Mexican progressive socio-political movements and organizations at the national level in order to create consensus around a democratic agenda that can gain momentum in the current conjuncture.

Hepzibah Muñoz-Martínez is a researcher and writer living in Mexico.

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