Softpanorama
May the source be with you, but remember the KISS principle ;-)

Contents Bulletin Scripting in shell and Perl Network troubleshooting History Humor

Neoliberalism as a New, More Dangerous, Form of Corporatism

Neoliberalism = Casino Capitalism = "Transnational elites, Unite!"
(It is a neoTrotskyism with the word "proletarians" substituted by the word "elites"
 in famous "Proletarians of all countries, Unite!" slogan
and "Color revolutions" instead of Communist  "Permanent revolution"  )

Version 6.1

Skepticism and Pseudoscience  > Who Rules America > Neoliberal Brainwashing

News An introduction to Neoliberalism Recommended books Recommended Links Neoliberalism war on organized labor Neoliberalism as Trotskyism for the rich Globalization of Financial Flows
Brexit as the start of the reversal of neoliberal globalization Neoliberal rationality Neoliberal "New Class" as variant of Soviet Nomenklatura Neoliberalism and Christianity Key Myths of Neoliberalism Ayn Rand and her Objectivism Cult Anti-globalization movement
Zombie state of neoliberalism and coming collapse of neoliberalism Pope Francis on danger of neoliberalism  Over-consumption of Luxury Goods as Market Failure Definitions of neoliberalism Neoliberal Brainwashing Neoclassical Pseudo Theories  US Presidential Elections of 2016 as a referendum on neoliberal globalization
Media-Military-Industrial Complex Neocons New American Militarism Casino Capitalism Neocolonialism as Financial Imperialism War is Racket Inverted Totalitarism
Financial Crisis of 2008 as the Crisis of Neoliberalism and shift to neo-fascism Neoliberal corruption Financial Sector Induced Systemic Instability of Economy Corruption of Regulators "Fight with Corruption" as a smoke screen for neoliberal penetration into host countries   Deconstructing neoliberalism's definition of 'freedom' Resurgence of neofascism as reaction on crisis of neoliberalism and neoliberal globalization
Alternatives to Neo-liberalism Elite Theory Compradors Fifth column Color revolutions  Key Myths of Neoliberalism Audacious Oligarchy and "Democracy for Winners"
If Corporations Are People, They Are Psychopaths IMF as the key institution for neoliberal debt enslavement Gangster Capitalism Neoliberalism as a Cause of Structural Unemployment in the USA Neoliberalism and inequality Blaming poor and neoliberalism laziness dogma Corporatist Corruption: Systemic Fraud under Clinton-Bush-Obama Regime
Peak Cheap Energy and Oil Price Slump The Deep State Predator state Disaster capitalism Harvard Mafia Small government smoke screen Super Capitalism as Imperialism
The Great Transformation Monetarism fiasco Neoliberalism and Christianity Republican Economic Policy  In Goldman Sachs we trust: classic example of regulatory capture by financial system hackers Ronald Reagan: modern prophet of profligacy Milton Friedman -- the hired gun for Deification of Market
Libertarian Philosophy Media domination strategy Neoliberal Brainwashing -- Journalism in the Service of the Powerful Few In Foreign Events Coverage Guardian Presstitutes Slip Beyond the Reach of Embarrassment History of neoliberalism Humor Etc


Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class warfare. “There’s class warfare, all right, "Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning."

- New York Times

Make no mistake, the neo-Liberal fuckers are just as bad as the Stalinists

May '68 and its Afterlives [Review]

GB: once a great cultured nation, now a poorly-educated gangster mafia state, ruled by oligarchs and inhabited by soccer hooligans

The Kremlin Stooge

Neoliberalism is a very interesting social system which by-and-large defeated and replaced both New Deal capitalism and socialism (and facilitated the dissolution of the USSR). It is the only social system in which the name of the system is somehow is prohibited by MSM to mention.  It is also unstable social system which led to impoverishment of lower 80% of the society and the rise of far right nationalism. After approximately 40 years of global dominance is shows cracks. Backlash against neoliberal globalization became really strong and demonstrated itself in Brexis, election of Trump is defeat of Italian referendum.

It can be defined as "socialism for the rich, feudalism for the poor" or, more correctly "Trotskyism for the rich"("Elites of all countries unite !"  instead of “Proletarians of all countries, Unite! ...). Due to the size the introduction was moved to a separate page --  Neoliberalism: an Introduction


Top updates

Softpanorama Switchboard
Softpanorama Search


NEWS CONTENTS

Old News ;-)

(Research materials to the paper Neoliberalism: an Introduction)

Neoliberalism Bulletin, 2017 Neoliberalism Bulletin, 2016 Neoliberalism Bulletin, 2015 Neoliberalism Bulletin, 2014 Neoliberalism Bulletin, 2013 Neoliberalism Bulletin, 2011 Neoliberalism Bulletin 2009 Neoliberalism Bulletin 2008

[Feb 15, 2017] Its Over Folks The Neocons The Deep State Have Neutered The Trump Presidency

Trump wants to tell Russia to do what? ( https://www.rt.com/usa/377346-spicer-russia-return-crimea/ ) ? To return Crimea? Is this what opposition to neocons means in Trumpspeak ???
Notable quotes:
"... "It's Over Folks" The Neocons & The "Deep State" Have Neutered The Trump Presidency ..."
"... For one thing, Flynn dared the unthinkable: he dared to declare that the bloated US intelligence community had to be reformed. Flynn also tried to subordinate the CIA and the Joint Chiefs to the President via the National Security Council. ..."
"... Put differently, Flynn tried to wrestle the ultimate power and authority from the CIA and the Pentagon and subordinate them back to the White House. ..."
"... Ever since Trump made it to the White House, he has taken blow after blow from the Neocon-run Ziomedia, from Congress, from all the Hollywood doubleplusgoodthinking "stars" and even from European politicians. And Trump took each blow without ever fighting back. Nowhere was his famous "you are fired!" to be seen. But I still had hope. I wanted to hope. I felt that it was my duty to hope. ..."
"... It's over, folks, the deep state has won. From now on, Trump will become the proverbial shabbos-goy , the errand boy of the Israel lobby. Hassan Nasrallah was right when he called him 'an idiot '. ..."
"... The Chinese and Iranian will openly laugh. The Russians won't – they will be polite, they will smile, and try to see if some common sense policies can still be salvaged from this disaster. Some might. But any dream of a partnership between Russia and the United States has died tonight. ..."
"... Trump, for all his faults, did favor the US, as a country, over the global Empire. Trump was also acutely aware that 'more of the same' was not an option. He wanted policies commensurate with the actual capabilities of the USA. With Flynn gone and the Neocons back in full control – this is over. Now we are going to be right back to ideology over reality. ..."
"... I am quite sure that nobody today is celebrating in the Kremlin. Putin, Lavrov and the others surely understand exactly what happened. It is as if Khodorkovsy would have succeeded in breaking Putin in 2003. In fact, I have to credit Russian analysts who for several weeks already have been comparing Trump to Yanukovich, who also was elected by a majority of the people and who failed to show the resolve needed to stop the 'color revolution' started against him. But if Trump is the new Yanukovich, will the US become the next Ukraine? ..."
"... Flynn was very much the cornerstone of the hoped-for Trump foreign policy. There was a real chance that he would reign in the huge, bloated and all-powerful three letter agencies and that he would focus US power against the real enemy of the West: the Wahabis. With Flynn gone, this entire conceptual edifice has now come down. We are going to be left with the likes of Mattis and his anti-Iranian statements. Clowns who only impress other clowns. ..."
Feb 14, 2017 | www.zerohedge.com
"It's Over Folks" The Neocons & The "Deep State" Have Neutered The Trump Presidency

Submitted and Authored by The Saker

Less than a month ago I warned that a 'color revolution ' was taking place in the USA . My first element of proof was the so-called "investigation" which the CIA, FBI, NSA and others were conducting against President Trump's candidate to become National Security Advisor, General Flynn. Last night, the plot to get rid of Flynn has finally succeeded and General Flynn had to offer his resignation . Trump accepted it.

Now let's immediately get one thing out of the way: Flynn was hardly a saint or a perfect wise man who would single handedly saved the world. That he was not.

However, what Flynn was is the cornerstone of Trump's national security policy . For one thing, Flynn dared the unthinkable: he dared to declare that the bloated US intelligence community had to be reformed. Flynn also tried to subordinate the CIA and the Joint Chiefs to the President via the National Security Council.

Put differently, Flynn tried to wrestle the ultimate power and authority from the CIA and the Pentagon and subordinate them back to the White House. Flynn also wanted to work with Russia. Not because he was a Russia lover, the notion of a Director of the DIA as a Putin-fan is ridiculous, but Flynn was rational, he understood that Russia was no threat to the USA or to Europe and that Russia had the West had common interests. That is another absolutely unforgivable crimethink in Washington DC.

The Neocon run 'deep state' has now forced Flynn to resign under the idiotic pretext that he had a telephone conversation, on an open, insecure and clearly monitored, line with the Russian ambassador.

And Trump accepted this resignation.

Ever since Trump made it to the White House, he has taken blow after blow from the Neocon-run Ziomedia, from Congress, from all the Hollywood doubleplusgoodthinking "stars" and even from European politicians. And Trump took each blow without ever fighting back. Nowhere was his famous "you are fired!" to be seen. But I still had hope. I wanted to hope. I felt that it was my duty to hope.

But now Trump has betrayed us all.

Remember how Obama showed his true face when he hypocritically denounced his friend and pastor Rev. Jeremiah Wright Jr. ? Today, Trump has shown us his true face. Instead of refusing Flynn's resignation and instead of firing those who dared cook up these ridiculous accusations against Flynn, Trump accepted the resignation. This is not only an act of abject cowardice, it is also an amazingly stupid and self-defeating betrayal because now Trump will be alone, completely alone, facing the likes of Mattis and Pence – hard Cold Warrior types, ideological to the core, folks who want war and simply don't care about reality.

Again, Flynn was not my hero. But he was, by all accounts, Trump's hero. And Trump betrayed him.

The consequences of this will be immense. For one thing, Trump is now clearly broken. It took the 'deep state' only weeks to castrate Trump and to make him bow to the powers that be . Those who would have stood behind Trump will now feel that he will not stand behind them and they will all move back away from him. The Neocons will feel elated by the elimination of their worst enemy and emboldened by this victory they will push on, doubling-down over and over and over again.

It's over, folks, the deep state has won. From now on, Trump will become the proverbial shabbos-goy , the errand boy of the Israel lobby. Hassan Nasrallah was right when he called him 'an idiot '.

The Chinese and Iranian will openly laugh. The Russians won't – they will be polite, they will smile, and try to see if some common sense policies can still be salvaged from this disaster. Some might. But any dream of a partnership between Russia and the United States has died tonight.

The EU leaders will, of course, celebrate. Trump was nowhere the scary bogeyman they feared. Turns out that he is a doormat – very good for the EU.

Where does all this leave us – the millions of anonymous 'deplorables' who try as best we can to resist imperialism, war, violence and injustice?

I think that we were right in our hopes because that is all we had – hopes. No expectations, just hopes. But now we objectively have very little reasons left to hope. For one thing, the Washington 'swamp' will not be drained. If anything, the swamp has triumphed. We can only find some degree of solace in two undeniable facts:

  1. Hillary would have been far worse than any version of a Trump Presidency.
  2. In order to defeat Trump, the US deep state has had to terribly weaken the US and the AngloZionist Empire. Just like Erdogan' purges have left the Turkish military in shambles, the anti-Trump 'color revolution' has inflicted terrible damage on the reputation, authority and even credibility of the USA.

The first one is obvious. So let me clarify the second one. In their hate-filled rage against Trump and the American people (aka "the basket of deplorables") the Neocons have had to show they true face. By their rejection of the outcome of the elections, by their riots, their demonization of Trump, the Neocons have shown two crucial things: first, that the US democracy is a sad joke and that they, the Neocons, are an occupation regime which rules against the will of the American people. In other words, just like Israel, the USA has no legitimacy left. And since, just like Israel, the USA are unable to frighten their enemies, they are basically left with nothing, no legitimacy, no ability to coerce. So yes, the Neocons have won. But their victory is removes the last chance for the US to avoid a collapse.

Trump, for all his faults, did favor the US, as a country, over the global Empire. Trump was also acutely aware that 'more of the same' was not an option. He wanted policies commensurate with the actual capabilities of the USA. With Flynn gone and the Neocons back in full control – this is over. Now we are going to be right back to ideology over reality.

Trump probably could have made America, well, maybe not "great again", but at least stronger, a major world power which could negotiate and use its leverage to get the best deal possible from the others. That's over now. With Trump broken, Russia and China will go right back to their pre-Trump stance: a firm resistance backed by a willingness and capability to confront and defeat the USA at any level.

I am quite sure that nobody today is celebrating in the Kremlin. Putin, Lavrov and the others surely understand exactly what happened. It is as if Khodorkovsy would have succeeded in breaking Putin in 2003. In fact, I have to credit Russian analysts who for several weeks already have been comparing Trump to Yanukovich, who also was elected by a majority of the people and who failed to show the resolve needed to stop the 'color revolution' started against him. But if Trump is the new Yanukovich, will the US become the next Ukraine?

Flynn was very much the cornerstone of the hoped-for Trump foreign policy. There was a real chance that he would reign in the huge, bloated and all-powerful three letter agencies and that he would focus US power against the real enemy of the West: the Wahabis. With Flynn gone, this entire conceptual edifice has now come down. We are going to be left with the likes of Mattis and his anti-Iranian statements. Clowns who only impress other clowns.

Today's Neocon victory is a huge event and it will probably be completely misrepresented by the official media. Ironically, Trump supporters will also try minimize it all. But the reality is that barring a most unlikely last-minute miracle, it's over for Trump and the hopes of millions of people in the USA and the rest of the world who had hoped that the Neocons could be booted out of power by means of a peaceful election. That is clearly not going to happen.

I see very dark clouds on the horizon.

* * *

  • UPDATE1 : Just to stress an important point: the disaster is not so much that Flynn is out but what Trump's caving in to the Neocon tells us about Trump's character (or lack thereof). Ask yourself – after what happened to Flynn, would you stick your neck out for Trump?
  • UPDATE2 : Just as predicted – the Neocons are celebrating and, of course, doubling-down:
  • Son of Captain Nemo , Feb 14, 2017 10:12 PM

    Trump wants to tell Russia to do what? ( https://www.rt.com/usa/377346-spicer-russia-return-crimea/ )

    Here is the REAL United States of America President ( https://www.israelrising.com/bibi-netanyahu-president-trump-see-eye-eye-... ) Booby!!!

    Smell the fetid gas coming out of this "Gluteal Cleft with horns" that owns the U.S. military!

    [Feb 15, 2017] Contrary to What Robert Samuelson Says We Did Bail Out the Bankers and Did Not Prevent a Second Great Depression

    Notable quotes:
    "... As far as the folks with uninsured loans that would have lost, well, many of these people were hedge-fund types and other financial institutions. They would have paid a price for not being very competent. The bailout ensured that they would not be left to suffer the consequences of their actions. ..."
    "... As far as the top executives of the banks, while some were shown the door, many of these people continue to earn paychecks in the millions or tens of millions as the financial sector remains hugely bloated. We had an opportunity to downsize the financial sector in one fell swoop, eliminating this enormous albatross which sucks money out of the economy and hands it to the very rich. ..."
    "... The narrow securities and commodities trading sector is now close to 2.5 percent of GDP ($470 billion a year). In the seventies, it was around 0.5 percent of GDP. Does anyone believe that capital is being allocated more effectively today than forty years ago or that our savings are safer? ..."
    Feb 15, 2017 | economistsview.typepad.com

    RGC : February 15, 2017 at 10:04 AM

    Contrary to What Robert Samuelson Says We Did Bail Out the Bankers and Did Not Prevent a Second Great Depression

    Dean Baker
    13 February 2017

    Robert Samuelson is unhappy that people continue to believe something that is true - that we bailed out the bankers - and happy that people still believe something that is not true - that we prevented a second Great Depression. In his column Samuelson complains:

    "The real Dodd-Frank scandal is that this misinterpretation of events, widely embraced by both parties, has been allowed to stand. In many bailouts, banks' shareholders suffered huge losses or were wiped out; similarly, top managers lost their jobs. The point was not to protect them but to prevent a collapse of the financial system."

    Okay, let's imagine the counterfactual. We decide to take the free market seriously and let it work its magic on Citigroup, Bank of America, Goldman Sachs and the rest of the high rollers. These huge banks all go into bankruptcy with the commercial banking parts of the operations taken over by the FDIC. All insured deposits are fully protected, with the FDIC and Fed having the option to raise the limits to protect smaller savers.

    The shareholders of these banks are out of luck. They have zero. Samuelson is right that share prices were depressed during the crisis, but that is different than going to zero. Furthermore, operating with the protection of Treasury Secretary Timothy Geithner's promise of "no more Lehmans," the share prices soon bounced back.

    As far as the folks with uninsured loans that would have lost, well, many of these people were hedge-fund types and other financial institutions. They would have paid a price for not being very competent. The bailout ensured that they would not be left to suffer the consequences of their actions.

    As far as the top executives of the banks, while some were shown the door, many of these people continue to earn paychecks in the millions or tens of millions as the financial sector remains hugely bloated. We had an opportunity to downsize the financial sector in one fell swoop, eliminating this enormous albatross which sucks money out of the economy and hands it to the very rich.

    The narrow securities and commodities trading sector is now close to 2.5 percent of GDP ($470 billion a year). In the seventies, it was around 0.5 percent of GDP. Does anyone believe that capital is being allocated more effectively today than forty years ago or that our savings are safer?

    The additional money spent operating this sector is a huge waste from an economic standpoint, which also plays a large role in the upward redistribution of the last four decades.

    In terms of preventing a second Great Depression, this is a nice children's story that the elite like to tell. (And, they get very mad and call people names if they don't agree - we are supposed to take name-calling by the elites very seriously.) We know how to get out of a depression, we learned that lesson in the last one. It's called "spending money."

    The claim that we would have suffered a decade of double-digit unemployment if we had not bailed out the banks is premised on a political claim, not an economic one, that we would never have spent the money needed to boost the economy out of a prolonged slump. This claim is not only that any initial stimulus would have been shot down, but even after two, three, or five years of double-digit unemployment the president and congress would not have agreed to a serious stimulus.

    This is a pretty strong claim since even tax cuts would serve to provide stimulus, albeit less than spending. (Anyone ever meet a Republican that didn't like tax cuts?) Remember, the first stimulus occurred with George W. Bush in the White House and a 4.7 percent unemployment rate. Those making the claim that in the counterfactual the politicians in Washington never would have done anything to boost the economy has a really low opinion of these folks intelligence and/or honesty. That would be a good topic for a column, if someone really believed it.

    http://cepr.net/blogs/beat-the-press/contrary-to-what-robert-samuelson-says-we-did-bail-out-the-bankers-and-did-not-prevent-a-second-great-depression

    [Feb 15, 2017] Google, Youtube and net neutarality

    Feb 15, 2017 | www.nakedcapitalism.com
    Eureka Springs , February 15, 2017 at 7:22 am

    Net neutrality has always been confined to the narrowest of meanings to a point of being self-defeating by simply self-kettling ourselves into such limited fights/expectations. I know you coastal and big city elites (that's half snark) will never understand much more empathize or rally with us flyover deplorables who are limited to 10 gigs a month no matter what provider we use, no matter how much we pay. I recently read that most homes with fiber now utilize over a thousand gigs a month that one HD movie can be much more bandwidth than my entire monthly 70 bucks can buy.

    Over twenty years ago the entire U.S. should have established high speed affordable unlimited fiber to every home on the grid and that's where the argument should be today. It covers the neutrality issue and so, so very much more. And it is far more inclusive of many more people who would benefit in so many ways. It's way past time to remove the internet highway system. Separate the content providers, the monitors, data mining, from the public highway system itself. That's where the beginning of neutrality should begin.

    So yes, point out the most egregious hypocrites in the misleadership class, but don't let them all win by keeping us divided and losing within the extremely limited confines of their argument.

    oh , February 15, 2017 at 8:59 am

    Among the many promises that Barry broke was the one to provide hi speed internet. One grifter follows another!
    We the people need to set some discrete goals and protest. Calling or writing to the Congress critters will not work. We need to storm their office on behalf each issue.

    Sally , February 15, 2017 at 2:14 pm

    "Separate the content providers, the monitors, data mining, from the public highway system itself. That's where the beginning of neutrality should begin."

    That is the key point.

    Trump would be an idiot if he allowed the likes of Google/UTube, Facebook, big tech boys to be able to start rigging the content because his campaign relied hugely on the Internet. A lot of his support by-passed the traditional TV/Newspaper media. I heard that Twitter are apparantly using ways and means to make his Twitter acccount only see hostile responses for the first 100 or so responses. Have no idea if that's true but some of these firms are getting very close to utility status.

    Anti trust laws should be wheeled out. They are already on the books.

    likbez , February 15, 2017 at 2:45 pm

    Your comment is awaiting moderation.

    Companies such as Netflix are essentially subsidized by telecom providers. So this is a model that somewhat reminds me of Uber.

    The same is true for Google (especially YouTube part of it) and Facebook. When somebody tries to download 4.7Gb movie that affects other people on the same subnet,

    On the other hand if, for example, popular blogs are forced to pay per gigabyte of consumed bandwidth, that is as close to censorship as we can get. 1000 gigabytes per month that is consumed by a medium site even at $1 per gigabyte is $1000 per month rent. And guess who will be able to afford it.

    There are a lot complex nuances here. For example, everybody who use wireless at home are not in the same group as who are using landlines (fiber or cable) even if they live in metropolitan areas. They are closer to flyover country residents.

    Also as soon as something is not metered some sophisticated forms of abuse emerge. For example, some corporations are abusing public networks by switching to "home office" model which dramatically cuts the required office and parking space. Several corporations built their new headquarters with the assumption that only half of employees are present at any given day (so called hotel model). When employees view some clueless corporate video conference via VPN that affects their neighborhood the same way as heavy Netflix users. Excessive WebEx videoconferences have a similar effect.

    Quanka , February 15, 2017 at 8:08 am

    +1 to Eureka Springs.

    Go back to Bill Clinton's administration when Verizon was a fledgling company and the government gave massive subsidies to the Telecoms to do exactly what Eureka Springs notes: bring fast, reliable internet service across the country. Fast forward to today - those companies took all the subsidies, didn't build out shit for network capacity, and now spend all their money lobbying to give themselves more power and limit net neutrality.

    If there were a microcosm for this whole problem, this is it. Dems give big subsidies to corporate players, dont track the work/take for granted that they "did something" and then get caught flat footed. Now we are all left to battle it out for the scraps. Exactly where we were 20 years ago.

    Watching the Oroville Dam, juxtaposing with all this "infrastructure spending" talk - everyone should be weary b/c we've been here before with Telecoms.

    cocomaan , February 15, 2017 at 9:12 am

    +1 to both of you!

    It reminds me of the land grant system that enabled the railroad industry to thrive.

    Guess what happened to Southern Pacific Railroad Company, who benefited greatly from this government intervention? Later, they turned into Sprint ( S outhern P acific R ailroad I nternal N etworking T elephony)!

    Scott , February 15, 2017 at 9:41 am

    I really wish I could get more worked up about Net Neutrality, but I can't. I'm deeply concerned about the high prices and lack of availability in much of the country, but I find that much of the debate boils down to conflict between Silicon Valley and the Telcos about who controls the internet. Content providers (Facebook, Google, Netflix) want to use the network effects to manipulate public opinion in their favored version of Net Neutrality, which seems to involve universal unmetered broadband, which ISPs must build out to meet demand, shifting costs from the providers to the ISPs, while profits go the other way. Meanwhile the ISPs do the tricks described in the post and overchange customers for poor service. I have little sympathy for either group.

    My general belief is that broadband should be cheap, universal, regulated, and, yes, metered. The latter would encourage high volume users and content providers to change their behavior and technology to use bandwidth more efficiently, which would reduce the size of the infrastructure needed over the long-term. I would also include search neutrality at the same time, but for some reason that doesn't have the same level of support among the technology industry.

    [Feb 15, 2017] Shiller Ten Year Cyclically Adjusted Price Earnings Ratio is almost 29 while the average is around 17

    Feb 15, 2017 | economistsview.typepad.com

    anne : February 15, 2017 at 05:12 AM

    http://www.multpl.com/shiller-pe/

    Ten Year Cyclically Adjusted Price Earnings Ratio, 1881-2017

    (Standard and Poors Composite Stock Index)

    February 14, 2017 - PE Ratio ( 28.97)

    Annual Mean ( 16.72)
    Annual Median ( 16.09)

    -- Robert Shiller Reply Wednesday,

    [Feb 15, 2017] Mankiw's Ten Principles of Economics, Translated

    Feb 15, 2017 | www.improbable.com

    by Yoram Bauman [1]
    University of Washington, Seattle, Washington

    The cornerstone of Harvard professor N. Gregory Mankiw's introductory economics textbook, Principles of Economics, is a synthesis of economic thought into Ten Principles of Economics (listed in the first table below). A quick perusal of these will likely affirm the reader's suspicions that synthesizing economic thought into Ten Principles is no easy task, and may even lead the reader to suspect that the subtlety and concision required are not to be found in the pen of N. Gregory Mankiw.


    I have taken it upon myself to remedy this unfortunate situation. The second table below summarizes my attempt to translate Mankiw's Ten Principles into plain English, and in doing so to provide the uninitiated with an invaluable glimpse of the economic mind at work. Explanations and details can be found in the pages that follow, but the average reader is advised to simply cut out the table below and carry it around for assistance in the (hereafter unlikely) event of confusion about the basic Principles of Economics.

    ------------------------------------------------------------

    Mankiw's Principles

    #1. People face tradeoffs.
    #2. The cost of something is what you give up to get it.
    #3. Rational people think at the margin.
    #4. People respond to incentives.
    #5. Trade can make everyone better off.
    #6. Markets are usually a good way to organize economic activity.
    #7. Governments can sometimes improve market outcomes.
    #8. A country's standard of living depends on its ability to produce goods and services.
    #9. Prices rise when the government prints too much money.
    #10. Society faces a short-run tradeoff between inflation and unemployment.

    ------------------------------------------------------------

    Yoram's Translations

    #1. Choices are bad.
    #2. Choices are really bad.
    #3. People are stupid.
    #4. People aren't that stupid.
    #5. Trade can make everyone worse off.
    #6. Governments are stupid.
    #7. Governments aren't that stupid.
    #8. Blah blah blah.
    #9. Blah blah blah.
    #10. Blah blah blah.

    ------------------------------------------------------------

    Explanations and Details

    At first glance, the reader cannot but be impressed by the translation's simplicity and clarity. Accessibility, however, should not be mistaken for shallowness: further study will reveal hidden depths and subtleties that will richly reward the attentive student. Indeed, a moment's reflection will identify any number of puzzles and mysteries. Chief among them is probably this: Why do Principles #8, #9, and #10 have identical translations?

    The immediately obvious explanation is that these are macro-economic principles, and that I, as a micro-economist, am ill equipped to understand them, let alone translate them.[2] As is often the case in this complex world we live in, this immediately obvious explanation is also wrong. The true reason I have provided identical translations of "Blah blah blah" for Principles #8, #9, and #10 is that these principles say exactly the same thing, namely, "Blah blah blah." Sometime when you've got a few hours to spare, go and ask an economist -- preferably a macro-economist -- what he or she really means by "standard of living" or "goods and services" or "inflation" or "unemployment" or "short-run" or even "too much." You will soon realize that there is a vast difference between, say, what Principle #10 says -- "Society faces a short-run tradeoff between inflation and unemployment" -- and what Principle #10 means: "Society faces blah between blah and blah." My translations are simply concise renderings of these underlying meanings.

    Having cleared up that issue, let us go back to Mankiw's

    PRINCIPLE #1
    People face tradeoffs.
    TRANSLATION: Choices are bad.

    The reasoning behind this translation is obvious. For example, imagine that somebody comes up to you and offers you a choice between a Snickers bar and some M&Ms. You now have a tradeoff, meaning that you have to choose one or the other. And having to trade one thing off against another is bad; President Truman supposedly asked for a one-armed economics advisor because his two-armed economics advisors were always saying, "On the one hand...but on the other hand..."

    People who have not received any economics education might be tempted to think that choices are good. They aren't. The (mistaken) idea that choices are good perhaps stems from the (equally mistaken) idea that lack of choices is bad. This is simply not true, as Mancur Olson points out in his book, The Logic of Collective Action: "To say a situation is 'lost' or hopeless is in one sense equivalent to saying it is perfect, for in both cases efforts at improvement can bring no positive results."

    Hence my translation of Mankiw's first principle of economics: Choices are bad. This concept can be a little difficult to grasp -- nobody ever said economics was easy -- but the troubled reader will undoubtedly gain clarity from Mankiw's

    PRINCIPLE #2
    The cost of something is what you give up to get it.
    TRANSLATION: Choices are really bad.

    Beyond transforming Mankiw's semantic deathtrap into simplicity itself, this translation has the advantage of establishing a connection between Principle #1 (Choices are bad) and Principle #2 (Choices are really bad).

    To continue to deepen the reader's understanding of why choices are bad -- really bad -- let's return to our previous example, in which somebody offers you a choice between a Snickers bar and a package of M&Ms. Suppose, for the sake of argument, that you take the M&Ms. According to Mankiw, the cost of those M&Ms is the Snickers bar that you had to give up to get the M&Ms. Your gain from this situation -- what economists call "economic profit" -- is therefore the difference between the value you gain from getting the M&Ms (say, $.75) and the value you lose from giving up the Snickers bar (say, $.40). In other words, your economic profit is only $.35. Although you value the M&Ms at $.75, having the choice of the Snickers bar reduces your gain by $.40. Hence Principle #2: Choices are really bad.

    Indeed, the more choices you have, the worse off you are. The worst situation of all would be somebody coming up to you and offering you a choice between two identical packages of M&Ms. Since choosing one package (which you value at $.75) means giving up the other package (which you also value at $.75), your economic profit is exactly zero! So being offered a choice between two identical packages of M&Ms is in fact equivalent to being offered nothing.

    Now, a lay person might be forgiven for thinking that being offered a choice between two identical packages of M&Ms is in fact equivalent to being offered a single package of M&Ms. But economists know better. Being offered a single package of M&M effectively means having to choose between a package of M&Ms (which you value at $.75) and nothing (which you value at $0). Choosing the M&Ms gives you an economic profit of $.75, which is $.75 more than your economic profit when you are offered a choice between two identical packages of M&Ms.

    At this point it is worth acknowledging that (1) there may be readers who have failed to grasp the above subtleties in their entirety, and (2) such readers may well be beginning to wonder whether they are, in a word, stupid. Any lingering doubts should be eliminated by the Mankiw's

    PRINCIPLE #3
    Rational people think at the margin.
    TRANSLATION: People are stupid.

    One point that is immediately obvious to the most casual observer with the meanest intelligence is that most people do not think at the margin. For example, most people who buy oranges at the grocery store think like this: "Hmmm, oranges are $.25 each. I think I'll buy half a dozen." They do not think like this: "Hmmm, oranges are $.25 each. I'm going to buy one, because my marginal value exceeds the market price. Now I'm going to buy a second one, because my marginal value still exceeds the market price..." We know most people don't think like this because most people don't fill their shopping baskets one orange at a time!

    But we are now led inexorably toward a most unhappy conclusion. If -- as Mankiw says -- rational people think at the margin, and if -- as we all know -- most people do not think at the margin, then most people are not rational. Most people, in other words, are stupid. Hence my translation of the third principle of economics: People are stupid.

    Before sinking into despair for the fate of the human race, however, the reader would be wise to consider Mankiw's

    PRINCIPLE #4
    People respond to incentives.
    TRANSLATION: People aren't that stupid.

    The dictionary says that incentive, n., is 1. Something that influences to action; stimulus; encouragement. SYN. see motive.

    So what Mankiw is saying here is that people are motivated by motives, or that people are influenced to action by things that influence to action. Now, this may seem to be a bit like saying that tautologies are tautological -- the reader may be thinking that people would have to be pretty stupid to be unmotivated by motives, or to be inactive in response to something that influences to action. But remember Principle #3: People are stupid. Hence the need for Principle #4, to clarify that people aren't that stupid.

    Only truly stupid people can fail to understand my translation of Mankiw's

    PRINCIPLE #5
    Trade can make everyone better off.
    TRANSLATION: Trade can make everyone worse off.

    But, the reader may well be asking, isn't the translation of the fifth principle the exact opposite of the principle itself? Of course not.

    To see why, first note that "trade can make everyone better off" is patently obviously: if I have a Snickers bar and want M&Ms and you have M&Ms and want a Snickers bar, we can trade and we will both be better off. Surely Mankiw is getting at something deeper than this? Indeed, I believe he is. To see what it is, compare the following phrases:

    A: Trade can make everyone better off.
    B: Trade will make everyone better off.

    Now, Statement B is clearly superior to Statement A. Why, then, does Mankiw use Statement A? It can only be because Statement B is false. By saying that trade can make everyone better off, Mankiw is conveying one of the subtleties of economics: trade can also not make everyone better off. It is a short hop from here to my translation, "Trade can make everybody worse off." (A numerical example can be found in Note #3, below.)

    The subtlety evident in Principle #5 is even more clearly visible in the next two principles.

    PRINCIPLE #6
    Markets are usually a good way to organize economic activity.
    TRANSLATION: Governments are stupid.

    and

    PRINCIPLE #7
    Governments can sometimes improve market outcomes.
    TRANSLATION: Governments aren't that stupid.

    To see the key role that Principle #5 plays in both of these statements, note that the original phrasing of Principle #5 ("Trade can make everyone better off") leads to Principle #6 ("Governments are stupid"). After all, if trade can make everyone better off, what do we need government for? But the translation of Principle #5 ("Trade can make everyone worse off") leads to Principle #7 ("Governments aren't that stupid"). After all, if trade can make everyone worse off, we better have a government around to stop people from trading!

    Like the first five principles, Principles #6 and #7 demonstrate the fine distinctions inherent in the economic way of thinking. People are stupid, but not that stupid; trade can make everyone better off, but it can also make everyone worse off; governments are stupid, but not that stupid. Exploring, refining, and delineating these distinctions is the subject matter of upper-level economics classes, doctoral dissertations in economics, and the vast majority of papers in the American Economic Review and other scholarly journals. Should the reader decide to follow this path, the fundamental principles described on the first page of this article will provide invaluable guidance.

    Acknowledgement

    Thank you to Ivars Skuja for assistance in taking and preparing the photographs[4] that accompany this article.

    Notes

    1. My own microeconomics text, Quantum Microeconomics, can be found online at <http://www.smallparty.org/quantum>.

    2. The exact meanings of the terms "micro" and "macro" may be lost on the reader -- or, more likely, may never have been found in the first place. This should not be cause for concern: absence of these terms from Mankiw's Ten Principles indicates that they are not of fundamental economic importance.

    3. Many non-economists (and some economists) are intimidated by numerical examples. To make it easier for those people to recognize that the following is a numerical example, it is formatted in very small type.

    Consider a small town with three families. It just so happens that Family #1 needs a snowblower, Family #2 needs a leafblower, and Family #3 needs a lawnmower; each family values their particular need at $200. Fortune appears to be smiling on this town, because it also just so happens that Family #1 owns a leafblower, Family #2 owns a lawnmower, and Family #3 owns a snowblower. These sit unused in their respective garages; each family has no use for its current piece of equipment, and therefore values it at $0.

    The situation appears ripe for gains from trade: Family #1 could buy a snowblower from Family #3 for $100, Family #2 could buy a leafblower from Family #1 for $100, and Family #3 could buy a lawnmower from Family #2 for $100. Each family would be $200 better off.

    Unfortunately, life in this small town is not so simple; the town is located in a valley that is susceptible to severe air pollution problems. Blowers and mowers emit large quantities of air pollutants, and in fact each blower or mower that is used will make air pollution so bad that hospital bills (for asthma, etc.) will increase by $80 for each family. Three additional blowers and mowers will therefore increase each family's bills by $240.

    Two results follow. First, the trades will still take place. For example, Family #1 and Family #3 will both be better off by $100 - $80 = $20 if Family #3 sells Family #1 its snowblower for $100. Second, the three trades together make everyone worse off: each family gains $200 from buying and selling, but loses $240 in hospital bills, for a net loss of $40.

    4. To accommodate schools that teach micro and macro separately, Mankiw's Principles of Economics is also published in separate pieces; the accompanying photographs are of the micro piece, Principles of Microeconomics. Note that the same Ten Principles of Economics (some micro, some macro) appear in all versions of the book.

    © Copyright 2003 Annals of Improbable Research (AIR)

    [Feb 15, 2017] Lysenkoism in the US economics: Mainstream economists who get paid well for their services are not that diverse

    Notable quotes:
    "... Yes economists are diverse as a group, but the opinions of the majority of that group might be described as having moved to the right since 1970. ..."
    Feb 15, 2017 | economistsview.typepad.com
    sanjait -> Jerry Brown... , February 15, 2017 at 10:38 AM
    Economists are enormously diverse as a group. Any piece that explicitly or implicitly describes them as being homogeneous is being reductionist at best.

    But Noah makes good points. Though it's probably worth emphasizing that if there exists a problem of communication between professionals and the public, there is probably mutual blame to be assigned. Economists should talk better to the general public, but as citizens we don't serve ourselves well when we expect the world to cater to our lack of knowledge and interest in complex but important issues.

    DrDick -> sanjait... , February 15, 2017 at 10:51 AM
    I have to disagree. It is the professionals who need to do a better job of educating the public. It is ridiculous to assume that the general public has the time or resources to discover this for themselves.
    Peter K. -> sanjait... , February 15, 2017 at 11:19 AM
    "Economists are enormously diverse as a group.

    Mainstream economists who get paid well for their services are not that diverse. For one thing, most are white males.

    That was Hillary's one good idea about the Fed. One.

    Peter K. -> sanjait... , February 15, 2017 at 11:20 AM
    "there is probably mutual blame to be assigned."

    What a masochist.

    Stockholm syndrome.

    Jerry Brown -> sanjait... , February 15, 2017 at 11:31 AM
    Yes economists are diverse as a group, but the opinions of the majority of that group might be described as having moved to the right since 1970. And often certain types of economists are described as fringe and there is a reluctance to discuss their ideas. That is somewhat understandable because any one economist has only so much time, but it seems to go deeper than that very often. Trade has been one of those areas, and I am happy to see many economists doing some re-evaluation of the free trade mantra, among other things. I would include Paul Krugman in that group.

    As far as being a knowledge lacking citizen- well we all are. Ain't no economist got it all completely figured out as far as I know. That's how I read Noah Smith's article, as a call to re-examine some previously sacred ideas with maybe a goal of keeping in mind their effects on different segments of society. And economists or anyone else who wants to impact public policy in a democracy certainly should expect to cater somewhat to those who are less knowledgeable about their theories.

    [Feb 15, 2017] Science advances one funeral at a time

    Feb 15, 2017 | economistsview.typepad.com
    Peter K. -> Jerry Brown... , February 15, 2017 at 05:42 AM
    I have come around to the idea to the idea that the people and the left have been ill-served by economists. Whether on trade or on other issues, they are used for their supposed expertise to argue against "populist" solutions. "Populist" solutions aren't efficient. Most center-left economists attacked Sanders for being unserious.

    People no longer trust them after being played.

    Krugman and others want it just to be about the blue time versus the red team, Keynesianism versus neoclassical. That's the acceptable frame of debate.

    But as the election of Trump has shown, it's more complicated than that.

    The left needs better economists. It's nice to see Piketty join the campaign of France's Bernie Sanders, who just beat their center-left Hillary in the Socialist primary. He knows things need to change.

    If he had joined Bernie Sanders campaign he would have been attacked by the center-left economists as "unserious" and "populist."

    Economists mostly argue from authority and people no longer trust their authority. Smith is suggesting they can fall back on empirics and science to boost their legitimacy only if their science backs the truth. Unfortunately economics is too political.

    Mike S -> Peter K.... , February 15, 2017 at 06:01 AM
    "The left needs better economists."

    Really? Offhand, I can think of Dr Krugman and Joe Stiglitz having won Nobel prizes. How many right wing economists have won a nobel in, say the last 25 years?

    Tom aka Rusty -> Mike S... , February 15, 2017 at 06:14 AM
    Krugman was wrong on the impact of trade on US blue collar workers, a more than minor error.

    But who cares about blue collar workers (except on voting day)?

    pgl -> Tom aka Rusty... , February 15, 2017 at 06:18 AM
    Care to provide a link to where Krugman declared no one would be hurt by a movement to free trade?
    Peter K. -> pgl... , February 15, 2017 at 07:10 AM
    Krugman made his career by bashing leftwing "populists" over trade and industrial policy.

    Rustbucket is right.

    BenIsNotYoda -> Peter K.... , February 15, 2017 at 07:15 AM
    Peter K is absolutely correct here in his criticism. Krugman made the transition in the 90s with the Clinton/Rubin economic regime. Their day is over. Obama embraced the same and we are all paying the price. By shooting down Bernie, they killed their chances in the election. We need a change. and yes, I agree with Noah. Economists should hold their head in shame. Not for not predicting the crisis. But for doing little afterwards than boosting asset prices.

    Repeat after me - High stock prices do NOT cure cancer.

    pgl -> BenIsNotYoda... , February 15, 2017 at 07:27 AM
    "Krugman made the transition in the 90s with the Clinton/Rubin economic regime."

    Check again - Krugman did not serve in the Clinton White House.

    Tom aka Rusty -> pgl... , February 15, 2017 at 07:45 AM
    Such clever use of language, of course he did not say that exact thing.

    You and I both have Rodrik's 1997 both, you know where the exceprt is, so don't be a #$%^.

    pgl -> Tom aka Rusty ... , February 15, 2017 at 08:16 AM
    I do have Rodrik's excellent book. Might you tell us which page this alleged statement is?
    JohnH -> pgl... , February 15, 2017 at 10:33 AM
    pgl's usual denial: "Care to provide a link to where Krugman declared no one would be hurt by a movement to free trade?"

    pgl intentionally ignores the link I posed many times wherein Krugman stated that labor would benefit from China's accession to WTO...3 million jobs lost later, Krugman finally started to rethink his full throated embrace of 'free' trade, but not pgl!

    All too often, economists posing as leftists, like PK, champion investor friendly policies, claiming that they will help labor. And then, when people finally start to catch onto the bait and switch, they wonder why people don't trust economists!

    pgl -> JohnH... , February 15, 2017 at 11:04 AM
    You provided a link? Really? Where is it?
    Mike S -> Tom aka Rusty... , February 15, 2017 at 06:24 AM
    Don't remember when this occurred; maybe you could provide a link. Lots of economists get things wrong occasionally, left and right wingers alike.

    But, being wrong occasionally doesn't support your reply. Dr Krugman is still a Nobel laureate.

    sanjait -> Tom aka Rusty... , February 15, 2017 at 10:42 AM
    Tom has no idea how much of the loss of blue collar labor demand in recent decades was due to trade policy vs non-policy related trade trends vs technology shifts.

    Further, he has no interest in even beginning to attempt to assess the issue.

    So I don't think he has any room to talk about who was "wrong" about the impact of trade on workers.

    And he is far from alone in this failing.

    DrDick -> Tom aka Rusty... , February 15, 2017 at 10:49 AM
    To the extent that he actually was wrong (he did minimize distributional effects in much of his earlier work), he has admitted it and changed his ways.
    Peter K. -> Mike S... , February 15, 2017 at 07:12 AM
    Stiglitz is good but he didn't stick his neck out and back Bernie Sanders.

    Krugman is bad in many ways. As I said in my comment, it's not just about Donkeys versus Republicans.

    kthomas -> Peter K.... , February 15, 2017 at 07:29 AM
    (yawn)
    RC AKA Darryl, Ron -> Mike S... , February 15, 2017 at 09:13 AM
    "...How many right wing economists have won a nobel in, say the last 25 years?"

    [Economists don't designate conservative or liberal when they hand up their shingle, so one must use supply side, Austrian School, and neoclassical orientations as a proxy for conservative ideology. New Keynesian is a little on the fence, say centrist.]

    Ronald Coase - 1991

    Gary Becker - 1992

    Robert Fogel (jointly with Douglass North, but North can only be definitively classified as eclectic with a whiff of neoclassical general equilibrium) -1993

    John Harsanyi, John Nash, and Reinhard Selten won jointly in 1994. They were the game theory guys, which along with their theory of non-cooperative games made considerable contributions to utilitarian ethics, which do no always lead to happy endings for broadly shared social welfare. They were NOT conservatives themselves by any stretch of the imagination, but they were not notably liberals either. Crazy people in search of impossible perfection but willing to cut off a few limbs to get there is my impression.

    Robert Lucas - 1995 ('nuff said)

    Praise the lord, holy Jesus in 1996 William Vickrey and James Mirrlees who ARE actual liberals were award the Nobel "for their fundamental contributions to the economic theory of incentives under asymmetric information," a topic of great interest to conservatives.

    Robert Merton (a social scientist) and Myron Sholes (a financial economist) won in 1997 "for a new method to determine the value of derivatives."

    I almost had a heart attack when I got to this one. Amartya Sen won in 1998 "for his contributions to welfare economics." Of course he is from India.

    Robert Mundell won in 1999 "for his analysis of monetary and fiscal policy under different exchange rate regimes and his analysis of optimum currency areas." Yep, this is the supply sider that gave the world the EU crisis.

    James Heckman "for his development of theory and methods for analyzing selective samples" and Daniel McFadden "for his development of theory and methods for analyzing discrete choice" won jointly in 2000, another case of two liberals getting awarded for research that was of interest to conservatives while being almost entirely unrelated to their own major contributions.

    Similarly in 2001, George Akerlof, Michael Spence, and Joseph Stiglitz won jointly "for their analyses of markets with asymmetric information." This one actually had liberal application, but my guess is they got it because conservatives were scratching their heads about where they went wrong with the dot-com bubble.

    OK, I got other stuff to do now, but you can take the link and figure it out for yourself. Clearly winning a Nobel still does not make an economists a champion of the liberal political cause. Still to go is Ed Prescott in 2004 if you get my drift.

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


    There is actually a book that discusses this in far greater detail that I only discovered well into my own analysis with Google and Wikipedia, but where I looked the experts that wrote the book had the same judgements and misgivings as I did.


    https://books.google.com/books?id=Qoj8CwAAQBAJ&pg=PA114&lpg=PA114&dq=James+Mirrlees+conservative+or+liberal&source=bl&ots=MHH0gXsjSP&sig=q387P51rcY372uI2SjAOZMb9Gvk&hl=en&sa=X&ved=0ahUKEwip4p3jw5LSAhWG8oMKHcOtCAUQ6AEILzAD#v=onepage&q=James%20Mirrlees%20conservative%20or%20liberal&f=false

    RGC -> Mike S... , February 15, 2017 at 09:36 AM
    I agree with Peter K.
    ...........
    The "Nobel prize" was established as 'The Swedish National Bank's Prize in Economic Sciences in Memory of Alfred Nobel".

    Some critics argue that the prestige of the Prize in Economics derives in part from its association with the Nobel Prizes, an association that has often been a source of controversy.

    Among them is the Swedish human rights lawyer Peter Nobel, a great-grandson of Ludvig Nobel.[27] Nobel criticizes the awarding institution of misusing his family's name, and states that no member of the Nobel family has ever had the intention of establishing a prize in economics.[28]

    According to Samuel Brittan of the Financial Times, both of the former Swedish ministers of finance, Kjell-Olof Feldt and Gunnar Myrdal, wanted the prize abolished, saying, "Myrdal rather less graciously wanted the prize abolished because it had been given to such reactionaries as Hayek (and afterwards Milton Friedman)."[25]

    Avner Offer's and Gabriel Söderberg's The Nobel factor: the prize in economics, social democracy, and the market turn (Princeton University Press 2016) argues that there has been a dramatic shift in the dominant macroeconomic theories among the academia, and that the creation of the Nobel in 1969 was the cause of this, as it enhanced the prestige of free market ideology and conferred upon it the status of science.

    https://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economic_Sciences
    ...........
    As for right wing winners, check out all the U of Chicago recipients.

    The 'Nobel" prize was established by a bank to promote the objectives of banks.

    And btw, Krugman is no leftwing economist.

    RC AKA Darryl, Ron -> RGC... , February 15, 2017 at 09:42 AM
    Excellent! THANKS!
    Peter K. -> RGC... , February 15, 2017 at 10:18 AM
    "I agree with Peter K."

    "Science advances one funeral at a time."
    - Max Planck

    [Feb 15, 2017] Americans arent as attached to democracy as you might think

    Notable quotes:
    "... Statistics can be made to slant any way you intend. ..."
    "... Stupid survey leads to dumber article and fucking ridiculous headline. Standard Guardian opinion I guess. ..."
    "... Seriously can you perhaps stop being so clickbaity? I've already lost the Independent because it went full on lefty Buzzfeed listical "you won't believe what they did to Trump when the lights went out". Don't follow them downwards. ..."
    "... On both side of the Atlantic, we don't have a 'democracy', we have an elected monarchy. The trouble is, this monarchy gets itself elected on the basis of lies, money and suppression. For a few brief years after WWII, there was an attempt to hold executives to account, but neoliberals put paid to all that. Nowadays, it's just as if nothing had changed since Henry VIII's time. ..."
    "... What we gave the ordinary Russian was neo-liberalism and they got screwed by it. Capitalisms greatest trick was to convince the many that it & democracy are the same thing. When actually, on many levels, they are totally at odds with each other. ..."
    Feb 15, 2017 | www.theguardian.com
    Statistics can be made to slant any way you intend. Essentially can be be used as another form of lie and propganada

    Lawrence Douglas

    But, the result changed when the data were narrowed to those who identified themselves as Trump supporters: 51% agreed that Trump should be able to overturn court decisions. 33% disagreed. 16% were not sure.

    It is tempting to attribute this difference between Trump supporters and others simply to the fact that the president's supporters prefer a more authoritarian style of government, prioritize social order, like strong rulers, and worry about maintaining control in a world they perceive to be filled with threats and on the verge of chaos.


    As the PPP's survey reveals, Trump is appealing to a remarkably receptive audience in his attempts to rule by decree – and many are no longer attached to the rule of law and/or democracy. Other studies confirm these findings. One such study found a dramatic decline in the percentage of people who say it is "essential" to live in a democracy.

    When asked to rate on a scale of 1 to 10 how "essential" it is for them "to live in a democracy," 72% of Americans born before World War II check "10," the highest value. But, the millennial generation (those born since 1980) "has grown much more indifferent." Less than 1 in 3 hold a similar belief about the importance of democracy.

    And, the New York Times reports that while 43% of older Americans thought it would be illegitimate for the military to take power if civilian government was incompetent, only 19% of millennials agreed.

    While millennials may be politically liberal in their policy preferences, they have come of age in a time of political paralysis in democratic institutions, declining civility in democratic dialogue, and dramatically increased anxiety about economic security.

    These findings suggest that we can no longer take for granted that our fellow citizens will stand up for the rule of law and democracy. That's why, while President Trump's behavior has riveted the media and the public, our eyes should not only be focused on him but on this larger – and troubling - trend.

    If the rule of law and democracy are to survive in America we will need to address the decline in the public's understanding of, and support for both. While we celebrate the Ninth Circuit's decision on Trump's ban, we also must initiate a national conversation about democracy and the rule of law. Civics education, long derided, needs to be revived.

    Schools, civic groups, and the media must to go back to fundamentals and explain what basic American political values entail and why they are desirable. Defenders of democracy and the rule of law must take their case to the American people and remind them of the Founders' admonition that: "If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself."

    We need to remember that our freedom from an arbitrary or intrusive government depends on the rule of law and a functioning democracy. We need to rehabilitate both – before this crisis of faith worsens.

    Austin Sarat is a professor of jurisprudence and political science at Amherst College

    , greatapedescendant , 11 Feb 2017 11:29

    "There is much to celebrate in the court decision against President Trump's immigration ban. It was a stirring victory for the rule of law and reaffirmation of the independence of the judiciary."

    A stirring victory of the rule of law? Hardly. More like an extraordinary act of politicised justice. And an orchestrated one at that. In my opinion that is, and as I see it at this point in time and from what I am able to discern.

    No. I do not see not see any stirring victories for the rule of law here here. Certainly no courage of truth or justice. Nor, as it happens, do I like this travel ban. Nevertheless, the court's ruling seems to me to be wrong since the constitution gives the president the power to enforce blanket bans against countries believed to pose a threat.

    I cannot see how the ban could justifiably be said to be aimed specifically at Muslims since it does not concern some 90 percent of the world's Muslim population. So it looks very much like a political decision from the 9th Circuit Court – and now San Francisco - in a tug of war between Democrats and Republicans.

    I am somehow reminded of the final "Yes we can" in Obama's farewell speech and of a sore loser – the vindictive Mrs Clinton. Some smooth transfer of power.

    The very fact that expert analysts are already sizing up what will be the Supreme Court's decision in terms of breaking the stalemate between 4 Republicans and 4 Democrats provides a perfect illustration of the politicisation of the judiciary at the highest level. Compatibly with this, Democrats are continuing to block Gorsuch's nomination.

    And compatibly with this the illusion of salutary Rawlsian** apolitical amnesiacs on the part of the judiciary disperses like Scotch mist.

    Somehow I have a clear mental picture of a newspaper editor, no one in particular, sitting back in his chair with a smug smile 'Look how we managed to swing that one', I hear him say. The principal protagonists here, overshadowing the US lawcourts, are the mainstream media. A power never to be underestimated, especially when the choir is singing in full maledictory and mephitic unison.

    **The reference is to A Theory of Justice, the monumental work on philosophy of law by John Rawls. It casts damning light on judicial impartiality by focusing on distorting criteria affecting juries. Worth reading in the context of attacks on the impartiality of the judiciary in US lawcourts taking place right now. And also in the wake of recent attacks on the judiciary in Britain over Brexit.

    , sam0412 imperium3 , 11 Feb 2017 11:53
    This,

    Interesting that Clinton's 52% is regarded as a God-given mandate where as the 52% for Leave is unfair as the voters were "too old/uneducated/outside London"

    In both campaigns if more people my age (26) had actually bothered to vote then the results would probably be very different.

    , Bluthner , 11 Feb 2017 11:34

    Only 53% of those surveyed said that they "trust judges more than President Trump to make the right decisions for the United States."

    But that is an utterly assinine question to ask anyone!

    "Making decisions for the United States" suggests setting policy. The judges Trump is so angry with aren't making policy decisions, they are interpreting the laws that already exist.

    Laws without and independent judiciary are not laws at all, they are just whims of whoever or whatever is in power. Might as well ask people do you prefer to live in a country that follows its laws or do you want to live at the whim of an irrational despot with irresponsible power who can do whatever the hell he pleases.

    This survey is clearly a case of garbage in garbage out. Which is a pity, because the subject is an important one.

    , LithophaneFurcifera Bluthner , 11 Feb 2017 12:03
    In a common law system, like those of Britain and the US, judges do make law. If there is no relevant legislation and no precedent, the judge is required to make new law in order to rule on the case, which will then be cited as precedent by future courts. In a civil law system, like those of continental Europe, judges merely interpret (and generalise, where necessary) the rules set out in statutes and codes, and have less scope to innovate.

    Of course, the recent case over Trump's immigration plans has been based on interpretations of the constitution though, but even interpretations are political (hence why the balance of power between liberals and conservatives on the Supreme Court is considered such a big issue).

    , Veryumble , 11 Feb 2017 11:35
    After nearly 40 years of corporate, lobbyist controlled politics, it's little surprise the younger generation have no faith in democracy. What on earth is the point in voting for two shades of the same shit?
    , YoungMrP , 11 Feb 2017 11:36
    You could argue that the US has never been a democracy. It is a strange democracy that allowed slavery, or the later segregation in the south, or that has systematically overlooked the rust belt taking all the gold for the liberal coasts.

    It seems democracy is simply a way of deciding who the dictator should be. Not unlike the U.K. Either.

    , YoungMrP therebythegrace , 11 Feb 2017 14:15
    If you were black in Alabama in the early 60s I don't think you would have enjoyed any more freedom, respect or control than your Russian counterpart at that time
    , jan oskar Hansen , 11 Feb 2017 11:38
    democracy is, of course, the best form of governance but in practice we see it benefit the wealthy who unhindered can rob
    the poor, only a socialist government can
    usher in a true government to do so it may
    be needed to have an authoritarian regime
    , Cape7441 jan oskar Hansen , 11 Feb 2017 11:55
    True socialism is a form of government which sounds wonderful in theory. In practice it has never successfully worked anywhere in the world. It does not take account of human nature.
    , Captain_Smartypants jan oskar Hansen , 11 Feb 2017 12:00
    Sorry but in the authoritarian nominatively socialist governments of the past the poor were as robbed off the fruit of their labour and their dignity as they are today.
    , BonzoFerret , 11 Feb 2017 11:39
    It's effectively a FPTP system that means you have a choice from only two parties. Even if someone could challenge they'd need to be a billionaire to do so. America is no democracy.
    , Andy Wong Ming Jun therebythegrace , 11 Feb 2017 14:22
    Germany under Adolf Hitler before he started WWII was not a zillion times worse than any of the contemporary powers in Western Europe. Neither was Franco's Spain. Looking in other areas of the globe and further away from the West, what about South Korea under Park Chung Hee? Would you call his dictatorship bad when he brought South Korea up to become one of the Asian 5 Tigers?
    , therebythegrace Andy Wong Ming Jun , 11 Feb 2017 15:14

    Germany under Adolf Hitler before he started WWII was not a zillion times worse than any of the contemporary powers in Western Europe

    Is that supposed to be a joke? If so, it's in very poor taste.

    My parents grew up in Nazi Germany. Yes, it was a zillion times worse. Political opponents were routinely murdered. There was no rule of law. Minorities, gay people etc were imprisoned, tortured, murdered, expelled.

    WTF are on you on about?

    , Metreemewall Andy Wong Ming Jun , 11 Feb 2017 15:50
    Clueless.

    Germany was broke, following their defeat in WWI; people were poor, humiliated,insecure and frightened for the future. In other words, the classic breeding ground for demagogues and extremists.

    After WWII, the Allies had learned their lesson and made sure that Germany should, for everyone's security, be helped to prosper.

    , Wehadonebutitbroke Andy Wong Ming Jun , 11 Feb 2017 16:05
    what about South Korea under Park Chung Hee? Would you call his dictatorship bad when he brought South Korea up to become one of the Asian 5 Tigers?

    The Friemanite right adored him and many of his equally repressive and dictatorial successors (just as they did Pinochet, Suharto (deemed by Transparency International to be the most corrupt leader in modern history to boot) and endless South American juntas etc).

    Every one else saw him for what he was - an authoritarian who had political opponents tortured and killed and who banned any form of protest.

    , John Favre praxismakesperfec , 11 Feb 2017 16:11

    And is it particularly surprising that Trump voters tend towards anti democratic authoritarianism?

    My dad and two of my brothers voted for Trump. Like most Americans, they detest authoritarian governments. I sincerely doubt you know any Trump voters - let alone ones who favor authoritarianism.

    , fauteuilpolitique , 11 Feb 2017 11:42
    How to misdirect readers with a BUT :

    In a cross-section of Americans, only 53% of those surveyed said that they "trust judges more than President Trump to make the right decisions for the United States." 38% said they trusted Donald Trump more than our country's judges, and 9% were undecided.

    But , the result changed when the data were narrowed to those who identified themselves as Trump supporters: 51% agreed that Trump should be able to overturn court decisions. 33% disagreed. 16% were not sure.

    The results are significantly the same, the But implies something different.

    , Paul B tenthenemy , 11 Feb 2017 13:32
    besides, the results are *not* significantly the same. Fauteuil's first sentence suggests that 53% (more than a Brexit majority, hence Will of the People) of Americans support the judiciary over the presidency. In contrast, a majority of Trump supporters, not unnaturally, take the opposite view.
    , sewollef , 11 Feb 2017 11:45
    Statistics can be made to slant any way you intend.

    So let's break this down: 51% of Trump supporters think he can do what he pleases. 51% means one quarter of those who voted in the US general election.

    If we estimate that only two-thirds of the electorate voted, that means in reality, probably less than 16% of total potential voters think this way.

    Not so dramatic now is it?

    , bananacannon , 11 Feb 2017 11:45
    Stupid survey leads to dumber article and fucking ridiculous headline. Standard Guardian opinion I guess.

    Seriously can you perhaps stop being so clickbaity? I've already lost the Independent because it went full on lefty Buzzfeed listical "you won't believe what they did to Trump when the lights went out". Don't follow them downwards.

    , Jympton , 11 Feb 2017 11:45
    On both side of the Atlantic, we don't have a 'democracy', we have an elected monarchy. The trouble is, this monarchy gets itself elected on the basis of lies, money and suppression. For a few brief years after WWII, there was an attempt to hold executives to account, but neoliberals put paid to all that. Nowadays, it's just as if nothing had changed since Henry VIII's time.
    , therebythegrace , 11 Feb 2017 11:46
    Sad that a new, stupid generation have to learn the truth of Churchill's dictum that 'Democracy is the worst form of government, except for all the others'.

    Sincerely hope for all of us that they don't have to learn this the hard way.

    I say this speaking as someone whose parents fled Nazi Germany, and who also spent time with relatives in the former East Germany prior to the wall coming down. Life under a dictatorship, whether of the right or left, is no picnic.

    , wikiwakiwik olderiamthelessiknow , 11 Feb 2017 12:32
    'Democracy is the worst form of government, except for all the others'.

    But is it democracy's fault when the option as to which kind of government we can choose is so narrow? Scary as it may sound, I think that the majority of young people would swap democracy just for some stability & safety. But what they fail to realize is that it's not democracy that's at the fault - but our form of capitalism. Look what happened in Russian when the wall came down & the free market rushed in & totally screwed over the ordinary Russian. Putin was, to some extent, a reaction to this. His strong man image was something they thought would help them. What we gave the ordinary Russian was neo-liberalism and they got screwed by it. Capitalisms greatest trick was to convince the many that it & democracy are the same thing. When actually, on many levels, they are totally at odds with each other.

    , NadaZero , 11 Feb 2017 11:47
    "Democracy is a great word, whose history, I suppose, remains unwritten, because that history has yet to be enacted." --Walt Whitman
    , EpicHawk , 11 Feb 2017 11:47
    Laws aren't final, they evolve with the needs of society. While I support this decidion I find all of this a bit silly and typical of that strange world.. "this is the law, therefor blabla.." I don't get why people even decide to study it in university. Most law students are like : "Yeah I don't know what to pick. Lets do Law, it'll give me a good job". Empty stuff really..
    , Brexit_to_Democracy , 11 Feb 2017 11:47
    Can someone please explain how the court has over ruled the executive order? From what I understand it's because it would harm some Americans - but does that mean using the same logic courts can undo tax increases, spending cuts, changes in abortion law? Or if the travel ban was instead passed by congress it would then be beyond the remit of judges?
    , Brexit_to_Democracy Brexit_to_Democracy , 11 Feb 2017 11:51
    And guns!! Surely judges could determine the second amendment can lead to a lot of harm?!
    , referendum Brexit_to_Democracy , 11 Feb 2017 12:21
    One example given was schools. Banning students from state universities, or professors, by preventing them from entering the country, was damaging to the schools capacity to earn money ( in tuition fees) and provide state education. Then there was the example of forcibly separating families.

    But this part of the ruling does not exist on it's own, it goes together with another part of the ruling, which was that there was no good reason for this action, since the Government had failed to provide that any person from any of these countries was a threat - which was the reason given in the executive order. For this and other reasons the Executive order was deemed to be not legally enforceable.

    Another problem is that this was an executive order, just a piece of paper signed by Trump, and the President does not have sole authority to make laws, there is also the judiciary and legislative branches - the courts and congress. If the travel ban had been passed by congress then the courts would probably have not been able to overturn it. In this game of stone scissors paper, the executive doesn't beat the other two - it needs one of them to rubber-stamp the decision if challenged. The argument that a presidential order should be all powerful and must be obeyed regardless of whether it was legal or not, was deemed by the judges to be anti constutional and thrown out of court.

    The other examples you give of tax increases or spending cuts or abortion might indeed cause harm, but providing they are not anti-constitutional, and they get through congress, and are not illegal, the harm wouldn't be taken into account.

    , Treflesg , 11 Feb 2017 11:48
    I would not have voted for Trump. I would not have voted for quite a few American Presidents before him either.
    But the hyperbole about Trump is being overdone.
    The USA is one of the oldest democracies on earth, and, one of only ten nations that have lasted as democracies for more than a century.
    By overstating Trump's impact, you are not helping.
    , mondopinion Treflesg , 11 Feb 2017 12:12
    It is actually a kind of hysteria. I remember Senator McCarthy's communist hysteria, and also the marijuana hysteria which swept through schools when I was a child in the 1950s.
    , Tongariro1 , 11 Feb 2017 11:48
    I'm a little surprised that there seems to be less debate in the USA about the electoral college for the presidency than I thought likely. Of course, the electoral college is a completely redundant if it never leads to a different result from a straightforward popular vote. As I understand it, the electoral college is designed to ensure that smaller states have a voice greater than their population size alone would deliver.

    But in a nationwide poll, on a binary issue, such as the election of the president or Brexit, I would have thought that each vote should count equally. SNP supporters might differ in this view, as would presumably US Democratic Party supporters.

    , unclestinky , 11 Feb 2017 11:48
    The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.- H. L. Mencken.

    Working so far.

    , MightyBuccaneer , 11 Feb 2017 11:49

    Public support for the rule of law and democracy can no longer be taken for granted.


    "no longer"?

    There was a mysterious absence of support for the rule of law when Obama used drones to extrajudicially assassinate American citizens.

    , MightyBuccaneer , 11 Feb 2017 11:51

    Only 53% of those surveyed said that they "trust judges more than President Trump to make the right decisions for the United States." In this cross-section of Americans, 38% said they trusted Donald Trump more than our country's judges. 9% were undecided.

    This means absolutely nothing regarding whether people support democracy and the rule of law.

    Were the results about Obama, the very same result would probably be interpreted as racism by the liberal media.

    , innnn , 11 Feb 2017 11:51
    Another poll from Public Polling Policy says that by a margin of 51/23 Trump supporters agree that the Bowling Green massacre shows that Trump's travel ban is a good idea.

    That's shows what you're up against and also why both Kellyanne Conway and Sean Spicer 'misspeak' so often.

    , cidcid , 11 Feb 2017 11:51

    A new national survey suggests that we can no longer take for granted that our fellow citizens will stand up for the rule of law and democracy

    Dear Austin, let me educate you a bit about the basics. The rule of law and democracy cannot both exist simultaneously in one society. The former has never been an American tradition. Read Tocqueville.

    The rule of law is characteristic of a totalitarian state where it is enforced by civil servant. The basic principle of such a state were described by Shang Yang 2400 years ago: a civil servant obeys the law, regardless of the will of his superior. Everyone obeys the law from top to bottom.

    In democracy people are judged by courts of jury. Which rule as they like, representing the public opinion, not the written law. Constitution doesn't exist either. Teddy Roosevelt explained when asked if his orders are constitutional: "The constitution was created for the people, not the people for the constitution".

    One nice example: the famous "Affirmative Action". It is obviously inconsistent with the most basic constitutional principle, that people are born equal. But it existed because the public didn't mind.

    , MathiasWeitz , 11 Feb 2017 11:52
    It makes me really wonder if americans (and other nations) are feeling something like a 'weimar' moment, when the germans in 1933 lost trust in their very young democracy after living for years under economic hardship and political pariah.
    There is so much that resembles the nazi-era, this xenophobia, that started with a slow decay of civil rights, the erosion of check and balances without the need to change the constitution.
    When we are heading for the similar kind of fascism like germany eighty years ago, at what point people should be held responsible for making a stand ?
    , MightyBuccaneer , 11 Feb 2017 11:54

    Schools, civic groups, and the media must to go back to fundamentals and explain what basic American political values entail and why they are desirable.

    Agreed. Special emphasis should be placed on accepting the results of elections, there appears to have been a recent surge in undemocratic sentiment on that front.

    , MrHubris MightyBuccaneer , 11 Feb 2017 11:57
    How about special emphasis on debunking lies from people like the cowardly, liar Trump? Share Facebook Twitter
    , therebythegrace MightyBuccaneer , 11 Feb 2017 12:48
    Are you confusing "accepting the results of elections' with 'denying people the right to peacefully protest'?

    If so, I think you are the one who could do with going back to the fundamentals and learning about what democracy entails.

    Share Facebook Twitter
    , eltonbraces MrHubris , 11 Feb 2017 12:50
    Perhaps sweet, caring, sharing Hillary could visit and put them straight.
    , CortoL , 11 Feb 2017 11:54
    Democracy? What democracy? Share Facebook Twitter
    , Streona25 , 11 Feb 2017 11:55
    Can you have a democratic plutocracy?
    , michaelmichael , 11 Feb 2017 11:56
    "Americans aren't as attached to democracy as you might think"

    you only just realised?? Wow

    'Democracy' is just a handy label for when the US wants to bomb another sovereign state

    , ErikFBerger , 11 Feb 2017 11:56
    "... trust judges more than President Trump to make the right decisions for the United States."

    This question is badly worded. It is not judges role to lead the country. The question should have been:

    "Should judges uphold the law to the best of their understanding, even if that means nullifying an order by president Trump?"

    , UnashamedPedant , 11 Feb 2017 11:59
    That link to the Federalist of 1788 on Checks & Balances is wrong. Here is the correct version:
    http://www.constitution.org/fed/federa51.htm
    , ayupmeduck2 , 11 Feb 2017 11:59
    I suspect that it's a change in what the word democracy means to people. Even the older generation are starting to understand that the 'democracies' that we live under in the western world are horribly distorted. Big corporations, even foreign ones, have far more access to the elected executive than the actual voters. Governments dance to the tune of powerful media. Votes don't often count for much at all.

    With this background it's no wonder that the Brexit voters feel drunk with power. For once they voted on something and believe that they will get exactly what they voted for. The final irony is that for most of them they don't realise that they were turkeys voting for Christmas. Brexit could have possibly bought them some benefits, but the Tories seem determined to deny them even that. Once the realise they have been swindled, what then for democracy?

    , sd0001 ayupmeduck2 , 11 Feb 2017 13:31
    People have lost faith in democracy, politics, the judicial system and, yes, economics.

    Voting to remain in the EU, is a vote for the status quo...if you're lucky. They want more government, not less. It is not a 20-50 year project. It is forever, and they will not stay still. It will evolve, and not regress politically.

    The UK government will have to change, and they have the chance. They may not succeed, but I believe they will try, and the pressure from the people will be more direct.

    The EU don't want to change. If it was an economic union and not a political one, then it would be a great organisation.

    Forget the garbage about wars and instability. That comes from economic success, with NATO providing any security until that comes to fruition to the developing countries.

    , FCBarca , 11 Feb 2017 12:00
    No surveys needed to arrive at these conclusions I am afraid, apathy and mistrust of govt has been eroding for decades. US government is a cesspool of corruption and in no small way is aided by the fact that its citizens have given tacit approval for the erosion of their own civil liberties and rights while celebrating the war machine that has increasingly rolled on for more than 3 decades

    The abyss looming for the US, and by extension the world, can be traced back to a populace that abandoned democracy and freely gifted the cronies the mandate to accelerate the erosion.

    Solution? Kill apathy and not only get back involved but remain vigilant to preserve checks & balances

    , Knapping , 11 Feb 2017 12:00
    Forty years ago, democracy was more or less synonymous with prosperity. Given it's now wider spread to many poorer states across the world, as well as the incredible increase in the standard of living in non-democratic countries, principally China, this is no longer the case. I suspect we have not made the case for democracy as an end in itself, nor as a route to distributing prosperity more widely, or as a corollary of 'The Free Market'.
    , J092939 Knapping , 11 Feb 2017 12:13
    This (democracy relates to prosperity) is insightful. Will we all be able to operate democratically when climate issues and exhaustion of resources vs. population force us to manage the decline?
    , timiengels , 11 Feb 2017 12:02
    A thought provoking article. Like many things it comes down to terminology .what, for example is democracy? Are the US or UK systems really democracies when it is clear that laws are enacted in the interests of a narrow group of citizens and corporations who have the power to lobby, especially in the US where bribery has been legalized with respect to lobbying.

    Beyond this, look at US attempts to come up with some sort of climate change plan. All of these flounder on the twin rocks of democracy with its lobbying (we'll never get voted in again) or economic cost to the tax payer (we'll get voted out next time).

    Democracy is always presented in our schools, TVs, books and newspapers as a universal good, when in reality there are good democracies and bad democracies with the US and UK versions actually being on the bad side what with an unelected second chamber of grandees in the UK and the US in a state of perpetual wars of choice.

    Countries are what they do. The US starts wars. The UK follows the US into wars. Most countries whether democratic or not, don't start many wars (Germany hasn't started too many wars since 1939). Many countries that don't start wars are actually controlled by non democratic governments or military juntas .and personally I would prefer non democracies that don't start wars. It's not a difficult concept to grasp.

    The main problems with all forms of government is abuse of power and it goes on in democracies as much as any other type of government. Look at Tony Blair astride the globe hoover-ing up millions instead of being sitting next the Bush in a 6X8 feet cell. When Britain and America fell asleep and accepted total state surveillance as the price they had to pay to stop a handful of terrorist deaths each year, they set themselves up for this power to be abused in the future and badly abused.
    What's the answer? Really it begins at home with lessons in honesty, modesty, selflessness and the like. The reality and the kids are plonked down in front of the TV watching the avarice of the Kardashians there is little hope.

    , uuuuuuu , 11 Feb 2017 12:02
    After the horrors of WWII most people in the developed world understood both, the dangers and merits of democracy. In fact there is a conventional wisdom that it is totalitarian regimes which start wars, never democracies. By and large that may be true, but I don't think it is true in every instance.

    But the major motivation for people is to press their own advantage, even it is to the detriment of somebody else. Even if it is quite evident that it is to the fatal detriment of somebody else. I guess religion describes this as our original sin. If that goal of personal advantage is better secured by a dictatorship then people (e.g. in 1930s Germany) will support that. Democracy is not a value in itself for the majority, but just a means to an end. After all, I suspect many would prefer to be rich in a totalitarian state, rather than poor in a democracy (especially those people who have never lived under a totalitarian regime).

    What people like Trump do is to legitimise this drive/desire/greed as something positive (greed is good, greed works), when all of our upbringing has told us otherwise. Otherwise we could just take to killing our siblings to acquire their larger bedrooms.

    I suspect the horrors of WWII have to be repeated to re-learn that lesson.

    , Peter55 , 11 Feb 2017 12:03
    oh well who cares. let the US rip itself apart from the inside, we all knew it was gonna happen sooner or later.

    there will be no need for a terrorist attack to destroy the US ,they manage that fine on their own. a 50/50 split in the population over values and believes? Regardless of who's right and who's wrong. Its so damaging that by the end of Trump Pax America will be history.

    US cant even keep control in their own backyard atm, thousands are killed within their own boarders every year by their own people, most average people will never get enough paid to sustain a adequate living condition, they struggle heavily with race and race related problems. They struggle heavily with females and female right.
    But most importantly they are not united, americans hate americans now. Many americans hate their fellow americans more than they hate outside enemies. And thats a fact. How can a society like that survive?

    The US will eat itself and Trump will probably earn a billion on it, he is after all a business man. He does what suits him best. But did anyone actually expect something els?

    , baxterb , 11 Feb 2017 12:03
    Make them afraid, then exploit that fear like there's no tomorrow. Heartening that people don't fall for it though.
    , Bluejil , 11 Feb 2017 12:04
    It does correlate with research that says one third of US residents believe you must be Christian to be American ( http://www.pewglobal.org/2017/02/01/what-it-takes-to-truly-be-one-of-us /). Jesus makes the laws.

    Take it a step further and apparently the word of Jesus is that you pull the ladder up after you and you look to the demagogue giving false praise to fantastical notions and mocking democracy.

    , Fred Ducleaux Bluejil , 11 Feb 2017 12:17
    There is much confusion between "Christian" America and America's Judeo-Christian Heritage. Books have been written.

    The heritage is what gave America, and Europe, Liberal Democracy and freedoms understood as "self-evident." That is, embedded and safe from lawyers and politicians. You do not need to be a "Christian" to enjoy the freedomos the heritage gives to all.

    , nottaken Fred Ducleaux , 11 Feb 2017 15:57
    "self-evident" is a strong clue that the constitution was informed more by man-centred Enlightenment than by residual Judeo-Christian Heritage.
    The majority of the framers were Atheists or Deists; any reference to God was part of the necessary legitimizing and marketing process. Since then it has been a process of Christianity (read: Protestantism) being merged with the civic religion, to the point where they are indistinguishable. Both have been mightily degraded in the process.

    More recently, corporate America's propaganda campaign to merge Christianity with Capitalism, fronted by Rev. J Fifield, was hugely successful, and has brought us to the present pass.

    , mikedow , 11 Feb 2017 12:04
    Sitting politicians create the laws the judges interpret.

    That seems to be a necessary reminder.

    Share Facebook Twitter
    , AgainstDarkness , 11 Feb 2017 12:05
    "While millennials may be politically liberal in their policy preferences... "

    They are not politically liberal. They might be vaguely called "socially liberal", supporting the causes prescribed to them by a new "progressivism" in the name of ill-defined tolerance, diversity etc.

    None of the above implies an understanding of liberal democracy.

    There have been many strains of the "left" in the past that would be classified as "liberal" under current American terminology but were totally undemocratic. That was why the term "democratic left" was invented to separate left-wing people that really believe in democracy.

    The modern "progressive identarian" is not a liberal.

    , Fred Ducleaux , 11 Feb 2017 12:08
    If you are a Green Card holder and leave the US you can incure tax liability for up to 10 years. Taxation without representation.

    But........the most flagrant departure from Democracy is giving the lawyers the final say on what is, or is not, the law. The legislature can pass whatever bills they may like but if the lawyers say it is offensive or phobic it will be struck down. The "Supreme" Court is the ultimate power in the USA and none are elected by the people and none can be removed by the people. The only way they go is in a box.

    Sad to say, Tony Blair (surprise surprise!) created the same undemocratic monster in our country and even labelled it the same way: "Supreme." Unelected, unaccountable and as politically motivated as its US counterpart.

    , Jack Taylor Fred Ducleaux , 11 Feb 2017 12:20
    By lawyers I guess you mean judges?
    , snavep Fred Ducleaux , 11 Feb 2017 12:22
    No the SC in the US can decide a law is contrary to the constitution.
    Can you give a single example where the UK SC has 'struck down' any legislation? They have declared govt decisions contrary to existing law including common law. You do seem to have a habit of coming on here making stuff up.
    , lochinverboy , 11 Feb 2017 12:08
    In the context of first past the post, democracy is a total con. If you examine those democracies with FPTP you wintness the most right wing governments on the planet that use this system. PR as is used across Europe prevents these extremes and all votes count. Do you think the Tories OR Labour will rush to change to this? No chance. Lastly, here and in the US, you have a choice of two broadly similar parties who serve the rich and powerful who have engineered democracy largely by contolling the press, to suit their own ends. By definition therefore, democracy here and in the US is a caricature of what was originally intended for the people and not fit for purpose.
    , Graz100 lochinverboy , 11 Feb 2017 12:20
    I support the introduction of PR, but it is a mistake to assume that any kind of voting system or institution will stop the collapse of democracy/ democratic institutions Economic and social strife will tend to overcome all safeguards when the public starts to feel desperate. A good example and warning from history is the rise of the Nazi party in pre WW2 Germany. Trump and the republicans have yet to destroy democracy and I see no suggestion that T will refuse to stand fro reelection.
    , Zojo lochinverboy , 11 Feb 2017 12:32
    I agree that the reason democracy has lost its lustre is because both her and in the US we are offered no real choice. In terms of economic policy, the "There is No Alternative" party always wins. Unsurprisingly, people start to believe that there IS no alternative, and therefore the choice on offer is not genuine. They then either lose interest in voting altogether, or look for more extreme offerings which seem to be truly different.
    , brightheart , 11 Feb 2017 12:14
    Bringing up the 'law and order' issues combined with blaming it on immigrants is typical of far right regimes that want to undermine democratic values and move towards dictatorship.
    , IanPitch , 11 Feb 2017 12:19 Guardian Pick
    By casting aspersions on the judiciary, Trump is echoing past dictators. First, he questions their independence and then, when another terrorist incident occurs (whether white or non-white) he can say 'I told you so, this atrocity is all the judge's fault'. America has truly entered a new dark age. Let's pray that good men and women will continue to uphold and defend the Constitution and the rule of law... Share
    , politicsblogsuk IanPitch , 11 Feb 2017 12:33
    An independent judiciary and a free press are considered the pillars or cornerstones of a properly functioning democracy.

    Once you undermine them or the public's trust in them, it is much easier to move the political centre of gravity towards fascism.

    So, why is Trump attacking the judiciary and fee press?

    , mondopinion politicsblogsuk , 11 Feb 2017 13:08
    I for one no longer think the mainstream 'free press' is balanced or impartial.
    , AgeingAlbion , 11 Feb 2017 12:23
    Democracy has been in decline in the west for some time now, and it isn't just the right or the left which has abandoned it. Nearly every western country has a bill of rights (either a strong version eg the US which can strike down legislation or a weaker one eg the U.K. where the courts award damages for breaches and make declarations of incompatibility). The EU has pros and cons but no one could pretend it is democratic. The UK still has the House of Lords. The Canadian academic James Allen has written a good book on it - how elites have now decided they know best.

    We need to be wary of this endless erosion of majority rule. Tin pot dictators the world over have always had an excuse for ignoring the majority. Latin American military Juntas always explained that they had to have power to ensure security. Human rights lawyers say they are needdd to uphold the ever evolving concept of human rights. The Church used to insist it should have power to enforce God's rule. The Fijian army in 1987 made an openly racist coup (attracting minimal opprobrium and next to no action from the international community). Even those who think there are sound reasons to ignore the majority have to admit they're not in great historical company

    , Philip J Sparrow AgeingAlbion , 11 Feb 2017 12:40
    "those who think there are sound reasons to ignore the majority"

    People like Socrates/Plato, John Stuart Mill, John Adams, Abraham Lincoln, James Madison, Alexis de Tocqueville...

    , emmasdad AgeingAlbion , 11 Feb 2017 12:49

    The EU has pros and cons but no one could pretend it is democratic.

    The EU is not a state; it is 28 member states acting collaboratively in a number of specified policy areas. As such, the appropriate comparison is not between the EU and a state but between the EU and other collective bodies through which states cooperate with one-another such as the UN or NATO. In terms of giving representation to ordinary citizens of its member states, I would say the EU compares extremely favourably.

    Moreover, the only two bodies in the EU that are able to enact legislation (and can only do so through the agreement of both bodies) are the EU Parliament, which is directly elected by the citizens of the member states and the Council, which consists of members of the Governments of the member states, which, in turn, have been put in place by the citizens of the member states through whichever electoral system is employed in each member state. We don't need to 'pretend' that the EU is democratic; it's system of governance IS democratic in the same way that the governance structures of western democracies are democratic.

    , Vintage59 emmasdad , 11 Feb 2017 15:01
    To put that more succinctly, no one can pretend the EU is democratic but many will still argue that it is if it fits their purposes.

    Amusing.

    , Gilbert3 , 11 Feb 2017 12:23
    Fewer people believe in the importance of democracy because we're several generations on from almost having lost it. In the same vein we're more likely to have a major war than we were 40/50 years ago because none of the major world leaders have experience of one. It's cyclic. We become complacent and smug until it happens again.
    , Gilbert3 , 11 Feb 2017 12:23
    Fewer people believe in the importance of democracy because we're several generations on from almost having lost it. In the same vein we're more likely to have a major war than we were 40/50 years ago because none of the major world leaders have experience of one. It's cyclic. We become complacent and smug until it happens again.
    , Andy Wong Ming Jun Gilbert3 , 11 Feb 2017 14:28
    History is a cycle. In this respect I agree with Steve Bannon. He's not nuts, he's just someone who knows how to read the winds very well like a wolf.
    , theshining , 11 Feb 2017 12:35
    "It was a stirring victory for the rule of law and reaffirmation of the independence of the judiciary."
    It most certainly was NOT anything of the kind. It was an act of judicial arrogance and a deliberate attempt to undermine the long upheld power of the President to take actions that HE considers required for the safety of the nation. What the ruling basically did was substitute judicial preferences for Presidential preferences no matter that the Constitution was clearly not supportive of this usurpation of power. you can review LOTS of legal opinions that state precisely this. An horrendously POLITICAL decision that will come back to haunt the courts.
    A defense of 'democracy' that begins with a defense of an arbitrary and demonstrably BAD court ruling is pretty much fatally flawed from the jump.
    Democracy works for as long as the fracture points in society are papered over with a commonality of basic interests. When that is not the case, democracy cannot endure. The US (and others will follow) is fracturing into pieces that simply don't like each other for VERY fundamental reasons, including the definition of a Nation State and what it means.
    Democracy works when things go well. It cannot work when it all falls apart. Oh and it also of course fails when the majority have a vested interest in getting stuff 'free', and can vote to have their demands enacted no matter the consequences.
    LOTS of places are not democracies. It really isn't the future. Too many fault lines coming up.
    , kristinezkochanski , 11 Feb 2017 12:35
    Only 53% of those surveyed said that they "trust judges more than President Trump to make the right decisions for the United States."

    One of the reasons why I am very sceptical of opinion polls or surveys is that they often ask the wrong questions. It is not for judges to make decisions about what is best for the country which this question clearly implies. Their job is to judge what complies with the law.

    Judges do not make political decisions about what is right for the United States any more than they do about what is right for the UK. It is this lack of understanding which leads to them being called enemies of the people.

    , ennCarey , 11 Feb 2017 12:38
    Here is the great George Carlin summing it all up in just 3 minutes and 14 seconds.

    It's called the American dream because you have to be asleep to believe it - George Carlin

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

    , dv420uk , 11 Feb 2017 12:38
    It all boils down to education. Democracy can't work when you have so many people prepared to believe and base their vote on 'fake news' (a nicer way to say lie).

    Governments in a democracy need to make having a well educated public a priority. Provide a high standard education for all the population up to secondary school level for free (or at a rate affordable to everyone) and you greatly diminish the chances of another Trump/Brexit.

    , therebythegrace dv420uk , 11 Feb 2017 12:52
    And that's why both the Tories and the Republicans have placed so much effort in undermining our education systems.

    They do not want an educated populace who are capable of critical thinking.

    , CyrusA dv420uk , 11 Feb 2017 12:59
    And hopefully diminish the chances of more "moderate" alternatives bringing the Population to its knees? Was Thatcher more "moderate" than Trump or did the Me Generation that she created usher in May and Trump.
    , Budanevey , 11 Feb 2017 12:39
    One person's victory is another's defeat. Politicians and voters are divided on judicial appointments to the Supreme Court, and the 4-4 split in the current court illustrates that the rule of law is simply another reflection of politics.

    I think the Ninth Court made a big mistake. Why? Because playing politics with the law can have serious unintended consequences. American Presidents have been resorting to shock and awe against Muslims because they can't use tough domestic security measures to protect Americans at home for fear of US judges taking an uncompromising view of constitutional rights. Trump's predecessors have not only resorted to foreign military action, but they have taken risks with extra-legal measures like Rendition, Secret Prisons, Torture and Drone attacks.

    The Ninth Court may uphold the constitutional rights of people coming from war zones to attend universities in Washington State, but the real world consequence of their hostility to domestic security measures will be to corner existing and future presidents in to bombing suspected terrorists abroad, making the world infinitely less safe with regime-changing wars.

    , SkiSpy Budanevey , 11 Feb 2017 12:45
    They have a hostility to unlawful, unconstitutional presidential edicts. That's a good thing. Share Facebook Twitter
    , Budanevey SkiSpy , 11 Feb 2017 12:55
    Congress gave the President the power to exclude people from the US on national security grounds. The University of Maryland maintains the Global Terrorism Database which lists more than 150,000 attacks since it began.

    96% of current terrorism killing more than 7000 people each year is claimed by jihadis. President Trump first mentioned his proposed temporary ban after the murders in San Bernardino.

    I don't think its unreasonable to restrict people coming from these war zones when they've been murdering people elsewhere, including Paris, Brussels, Berlin etc. It seems that US judges can't be persuaded that the right to life is more important than the temporary inconvenience of not being able to attend universities in Washington State unless and until such people murder Americans on American soil. I wouldn't call that 'constitutional'. It's offensive stupidity and irresponsible.

    How man

    , Joe Soap Budanevey , 11 Feb 2017 13:17
    If Americans were so concerned about the right to life they would do something about their almost non-existent gun laws. Terrorists don't have to kill Americans since Americans are doing such a good job of it on their own.
    , brap123 , 11 Feb 2017 12:40
    Americans are waking up to the fact that the elite and establishment don't care about the them. The media lies, the courts are trying to let in terrorists. TRump is the only one who is fighting for the people. Trump is fighting for truth, Trump is fighting for our safety, even though the establishment is desperate to make us less safe (my guesss do the 1% can profit somehow). Fake news by the media is only continue to push this

    Trump is fighting for Americans, we need to unite behind him. He will never let us down, and never lie to us.

    , c23e , 11 Feb 2017 12:40
    It's funny how Americans use Christianity as a weapon and are always quoting an eye for an eye etc instead of love your neighbour. If you are a Christian then surely you should realise that the old testament which is The Torah is all about revenge and anger whereas the New Testament is all about forgiveness and love and if the two come from the same God then that God has a spilt personality!

    Also looking at history if you remember that Islam is 600 years younger than Christianity ask yourself what were Christians doing 600 years ago and you will see a lot of it was the same as what Jihardis are doing today - torture, beheadings and killing of those seen as apostates in the name of religion.

    And remember American was founded by those seeking religious freedom despite the fact they oppressed the religions of the Native Americans and then went on to break more than 400 treaties with the Native Americans over the years.

    Even the declaration of independence was signed mainly by slave owners ( which is surely anti-christian) and apartheid reigned in the US until Martin Luther King.

    Land of the free and home of the brave is some king of joke played on the people but only noted by historians.

    , PureReason2017 , 11 Feb 2017 12:44
    To an important degree extensive, well-understood and articulately defended democracy only "matters" if you ascribe a large role to the [nation/federal] state - if you think it should spend very large amounts of money, address all manner of social problems, and regulate everything people do to reduce risk and enforce equality/diversity. If you believe in a minimal state (as most of the US founders did) then a much clearer and less pressing kind of democracy for national affairs is fully adequate. It is at the local level - in the states and counties, the towns and cities - that regular and engaged democracy is essential. And this report does not look at that at all. It is only bothered about who gets to drive forward the all-powerful state. If Pres Trump - and it is a very big if - wants to reduce the role of the state, then the significance of his actions through that state become clearer and more capable of control.
    , Paul B PureReason2017 , 11 Feb 2017 13:00
    surely the problem is that so much of what happens in a modern democracy cannot be carried out at a local level. You cannot have a local level internet. You cannot decide where your highways and trains are going to go purely at the local level. You cannot, in most cases, feed and clothe and support your population at the local level and any form of trade requires agreements that take place at a much higher level.
    , Junkets , 11 Feb 2017 12:46
    It's a very interesting phenomenon. The 'attraction' of Trump is that he's a loose cannon and doesn't seem to have that much control over a lot of what he says. The remarks about Putin and America's own predilection for killing people - which caused him to be called anti-American for actually speaking the truth - is a case in point. He is the precise opposite of your usual buttoned up on-message politician and that, quite frankly, is refreshing. He is precisely where our democracy itself has led to. Because of its reliance on professional politicians who say one thing and mean another, his tendency to blabber and say just what's on his mind, must be perceived as a virtue. Where this will lead, I have no idea, but he is definitely opening up new unexplored territory and what we might find in it is anyone's guess. As the old Chinese curse goes, "May you live in interesting times."
    , Junkets Junkets , 11 Feb 2017 12:57
    For those thinking of impeaching Trump, think what the alternative will be. Pence. Now that guy really is scary - scarier even than Bannon.

    [Feb 14, 2017] Deep state is way too strong and Trump rebellion , if such existed, can be squashed with the help of big guns of NYT, Wapo and Bloomberg charged with good old compromat

    Trump has no party behind him. And he is no FDR to hit establishment with the full force of Federal Administration
    Notable quotes:
    "... This not about "how easy to convict Trump". This is about who is the real boss in Washington, DC. ..."
    "... Today's Neocon victory might well as huge event as Trump victory. Now it is Trump defeat. I think it's over for Trump... He did not last long, did he ? From now on he might well be just "yet another puppet". Much like Obama, or Bush II, or Clinton. ..."
    "... Neocons are celebrating. That's for sure. Deep state is way too strong and "Trump rebellion", if such existed, in now squashed with the help of big guns of NYT, Wapo and Bloomberg charged with good old "compromat". ..."
    Feb 14, 2017 | economistsview.typepad.com
    im1dc : February 14, 2017 at 06:56 PM

    Margaret Carlson rips Trump not for lying but for covering up Flynn

    My point confirmed!

    http://www.thedailybeast.com/articles/2017/02/14/flynn-s-the-first-casualty-of-trump-s-unsustainable-disinformation-campaign.html

    "Flynn's the First Casualty of Trump's Unsustainable Disinformation Campaign"

    'In this White House, honesty is not the best policy but one to be considered among other possibilities"

    by Margaret Carlson...02.14.17...2:06 PM ET

    "General Michael Flynn didn't resign Monday night because he lied about his calls with the Russian ambassador and was vulnerable to blackmail. He resigned because the public found out about the lie and keeping him, at long last, became "unsustainable" for the Trump administration.

    Just a few hours earlier, it was sustainable. White House counselor Kellyanne Conway said so. The president, she said Monday afternoon, had "full confidence" in Flynn. Another White House official confirmed this to Washington Post reporter Philip Rucker who reported, also on Monday, that Trump, knowing what he knew, wasn't going to decide about Flynn for a few more days.

    What changed? Throw out the old saw it's the cover-up that gets you. The White House ceded Tuesday that it knew about the cover-up for weeks. It's the dribbling out of the details of Flynn's mission to coddle Russia-in keeping with Trump's policy-that presented a clear and present danger that could only be staunched if Flynn were let go.

    But they want us to believe it was about the lying. At his daily briefing Tuesday, Sean Spicer said it was "plain and simple a matter of trust." But in this whole mess, lying is a lesser included offense, one which this White House is particularly unsuited to cast stones at. Honesty is not the best policy there but one to be considered among other possibilities.

    There would have been no resignation if what Flynn said in the taped calls, and White House knowledge of it, hadn't been exposed late Monday in a Washington Post piece. The White House counsel-and likely others in the Administration-had been told by then Acting Attorney General Sally Yates that Flynn had actually made multiple calls, during the transition and going back to the campaign, to the ambassador of a sworn adversary of the United States. Flynn's message to the ambassador was that President Vladimir Putin might want to hold off on retaliating for sanctions imposed by then President Barack Obama for hacking the U.S. elections. It wouldn't be that bad under the new president.

    Yates' information was reportedly weeks late getting to the White House because FBI Director James Comey, who seems to be everywhere these days, asked her to hold off because of his ongoing investigation into contacts between Trump associates and Russia. But after they'd been told, Spicer put out the opposite of what the Justice Department knew to be true: that Flynn had discussed Christmas greetings, among other things, not sanctions in his calls. With that disinformation (Spicer likely didn't know the truth), Comey's request fell by the wayside and Yates, since fired by Trump for not backing him up on his travel ban but perhaps for this, proceeded to inform Trump White House counsel Donald McGahn. (McGhan, Spicer said Tuesday, immediately informed Trump.)

    Whatever Flynn said, we know Putin took his outreach to heart and let the sanctions pass virtually unnoticed. Since the calls, we might ask who has done more to coddle Russia, Flynn or the president. Trump has kept praising Putin to the point of accusing the country he now leads of killing its own people as Putin has done to his internal enemies. The two countries, in Trump's telling, are morally equivalent.

    To the excuses for why Flynn was let go, add "leaks" which Trump blamed in a tweet for all that's wrong in Washington.

    On TV, Trump surrogates including former military officer Carl Higbee, who's been interviewed for a high level White House job, have dressed up the resignation in the usual nothing's-been-proven talk about how Flynn had become a "distraction" and that this is a "rough town for good people." Actually, that's true but not the case here as few people not on Trump's payroll thought Flynn was the right choice.

    The only reason Flynn got appointed to the most sensitive job in the Administration is that he is a crony of Trump who stuck by him during the campaign and who could be trusted to do his bidding without asking too many questions. If National Security Adviser were a post that required Senate confirmation, Republicans, who have acquiesced to about everything else, would have balked. By a margin even wider than those who dare to question the month-old presidency-that is Republican Senators John McCain, Lindsey Graham and Jeff Flake-Flynn wouldn't have made it.

    With Flynn's ouster, the Wall Trump was actually been able to build around himself may crumble. Until now calls for an independent investigation into the Russian hacking have been rejected. Now, that investigation is likely to proceed, along with McCain's effort to codify Russian sanctions. Speaker Paul Ryan may eventually grow a spine. Amid a running joke at his Tuesday press conference wishing wives of the leadership a Happy Valentine's Day, Ryan was pinned down to admitting Flynn was rightly let go. Look for the heat to be turned up on the inquiry into the ties between Russia and Trump's former campaign manager, Paul Manafort.

    Just maybe there may be less flagrant lying now from this administration. This last weekend, Trump's anointed wunderkind Stephen Miller was sent out on his first Sunday morning talk show appearances. He regurgitated Trump's insistence that there's rampant voter fraud in the country and a costly investigation should ensue. Miller brought up the fact-free claim that hordes of Massachusetts voters drove to New Hampshire to cast illegal ballots in November. Fresh denunciations of that claim came afterwards from former New Hampshire GOP chair Fergus Cullen and from current New Hampshire Governor Chris Sununu, a scion of the multigeneration Republican loyalists, who said it was false. Don't think Miller was freelancing.

    The only praise for Miller came from Trump himself who lavished him with it. In this White House, lying is not a firing offense.

    Trump is having a hard time in his public effort to replace Spicer and perhaps his chief of staff in an effort to fine one single person with the experience and maturity to mind the store. That looks easy compared to replacing Flynn. Trump has made it clear he won't hire anyone who's criticized him. In filling the open national security adviser position, that leaves almost no one."

    ilsm -> im1dc... , February 14, 2017 at 07:12 PM
    What "public"? Not the one which elected most of the state governments. Maybe the one which pushed Bernie aside for no convictions Clinton.

    How easy to convict Trump and his while HRC was always innocent and picked upon.....

    ilsm -> im1dc... , February 14, 2017 at 07:12 PM
    What "public"? Not the one which elected most of the state governments. Maybe the one which pushed Bernie aside for no convictions Clinton.

    How easy to convict Trump and his while HRC was always innocent and picked upon.....

    libezkova said in reply to ilsm... , February 14, 2017 at 07:37 PM
    "How easy to convict Trump and his while HRC was always innocent and picked upon....."

    This not about "how easy to convict Trump". This is about who is the real boss in Washington, DC.

    Today's Neocon victory might well as huge event as Trump victory. Now it is Trump defeat. I think it's over for Trump... He did not last long, did he ? From now on he might well be just "yet another puppet". Much like Obama, or Bush II, or Clinton.

    There was a dream that with the election of Trump neocons will be booted from Washington, DC by peaceful means via electoral mechanisms or at least their influence will be cut. It was a high time to do this clean up, anyway. They outlived their usefulness long ago (if they were useful ever). This dream now is probably over. Wolfowitz, Perle, Ledeen, Robert Kagan and Co are back.

    For nationalists and "nationally oriented part of US capitalists" now the choice is very difficult.

    libezkova -> im1dc...
    Neocons are celebrating. That's for sure. Deep state is way too strong and "Trump rebellion", if such existed, in now squashed with the help of big guns of NYT, Wapo and Bloomberg charged with good old "compromat".

    After losing Flint Trump is done.

    The problem that Trump is facing is that now he does not have any viable support to counterbalance neocon dominated faction of intelligence services.

    Essentially Trump task was impossible from the very beginning. Most of the Washington DC neocon nests needed to be cleaned. And that is much more difficult than Hercules clean up of the Augean Stables

    http://www.perseus.tufts.edu/Herakles/stables.html
    == quote ==
    For the fifth labor, Eurystheus ordered Hercules to clean up King Augeas' stables.

    Hercules knew this job would mean getting dirty and smelly, but sometimes even a hero has to do these things. Then Eurystheus made Hercules' task even harder: he had to clean up after the cattle of Augeas in a single day.

    Now King Augeas owned more cattle than anyone in Greece. Some say that he was a son of one of the great gods, and others that he was a son of a mortal; whosever son he was, Augeas was very rich, and he had many herds of cows, bulls, goats, sheep and horses.
    ... ... ...

    [Feb 14, 2017] Ancient Chinese curse: May you live in interesting times!

    Notable quotes:
    "... Flynn's sin was inferring to the Russian ambassador that senselessly pushing Russia into a corner for Vicky Nuland might end. ..."
    Feb 14, 2017 | economistsview.typepad.com
    There's that notorious ancient Chinese curse: 'May you live in interesting times!'

    Sadly, according to Wikipedia:

    Despite being widely attributed as a Chinese curse, there is no equivalent expression in Chinese. The nearest related Chinese expression is "寧為太平犬,莫做亂離人" (nìng wéi tàipíng quǎn, mò zuò luàn lí rén), which is usually translated as "Better to be a dog in a peaceful time, than to be a human in a chaotic (warring) period."

    ilsm -> Fred C. Dobbs... , February 14, 2017 at 07:00 PM
    It s reputed the Chinese kangji for crisis is: two words 'opportunity and danger'.
    Fred C. Dobbs -> im1dc... , February 14, 2017 at 04:41 PM
    "May you live in interesting times" is an English expression purporting to be a translation of a traditional Chinese curse. Despite being so common in English as to be known as "the Chinese curse", the saying is apocryphal and no actual Chinese source has ever been produced. ...

    Evidence that the phrase was in use as early as 1936 is provided in a memoir written by Hughe Knatchbull-Hugessen, the British Ambassador to China in 1936 and 1937, and published in 1949. He mentions that before he left England for China in 1936 a friend told him of a Chinese curse, "May you live in interesting times". ...

    http://research.omicsgroup.org/index.php/May_you_live_in_interesting_times

    (I'm sure all remember Sir
    Hughe Knatchbull-Hugessen.)

    ilsm -> im1dc... , February 14, 2017 at 07:06 PM
    There is a lot of pity party nitpicking going on.

    When Trump gets the peace prize and talks about starting wars to stop unjust peace and nation build with no success.....

    Flynn's sin was inferring to the Russian ambassador that senselessly pushing Russia into a corner for Vicky Nuland might end.

    Why the Russians are doing the new GLCMs is perfectly reasonable from their perspective. It is called looking out for your country, which US is doing with blood all over but US is the exceptional shining city on the hill.

    And if Trump is a war criminal W. and Obama better look out for the Haig coming after them.

    [Feb 13, 2017] John Kenneth Galbraith on Monetary Policy:

    Notable quotes:
    "... The perverse unusefullness of monetary policy and the frustrations and danger from relying on it. This is perhaps the clearest lesson of the recent past. The management of money is no longer a policy but an occupation. Though it rewards those so occupied, its record of achievement in this century has been patently disastrous. ..."
    "... It worsened both the boom and the depression after World War 1. It facilitated the great bull market of the 1920s. It failed as an instrument for expanding the economy during the Great depression. When it was relegated to a minor role during World War 11 and the good years thereafter, economic performance was, by common consent, much better. Its revival as a major instrument of economic management in the late '60s and early '70s served to combine massive inflation with serious recession. ..."
    "... And it operated with discriminatory and punishing effect against, not surprisingly, those industries that depend on borrowed money, of which housing is the leading case. To argue that it was a success may well be beyond even the considerable skills of its defenders. Only the enemies of capitalism will hope that, in the future, this small, perverse and unpredictable lever will be a major instrument in economic management. ..."
    Feb 13, 2017 | economistsview.typepad.com
    RGC : February 13, 2017 at 06:13 AM , 2017 at 06:13 AM
    John Kenneth Galbraith on Monetary Policy:

    "If the near future is an extension of the near and more distant past, there are six imperatives that will shape or control monetary policy and the larger economic policy of which it is now a lesser part. these are:

    (1) The perverse unusefullness of monetary policy and the frustrations and danger from relying on it. This is perhaps the clearest lesson of the recent past. The management of money is no longer a policy but an occupation. Though it rewards those so occupied, its record of achievement in this century has been patently disastrous.

    It worsened both the boom and the depression after World War 1. It facilitated the great bull market of the 1920s. It failed as an instrument for expanding the economy during the Great depression. When it was relegated to a minor role during World War 11 and the good years thereafter, economic performance was, by common consent, much better. Its revival as a major instrument of economic management in the late '60s and early '70s served to combine massive inflation with serious recession.

    And it operated with discriminatory and punishing effect against, not surprisingly, those industries that depend on borrowed money, of which housing is the leading case. To argue that it was a success may well be beyond even the considerable skills of its defenders. Only the enemies of capitalism will hope that, in the future, this small, perverse and unpredictable lever will be a major instrument in economic management.

    The central bank remains important for useful tasks - the clearing of checks, the replacement of worn and dirty banknotes, as a loan source of last resort. These tasks it performs well. With other public agencies in the United States, it also supervises the subordinate commercial banks. This is a job which it can do well and needs to do better. In recent years the regulatory agencies, including the Federal reserve, have relaxed somewhat their vigilence. At the same time numerous of the banks have been involved in another of the age-old spasms of optimism and feckless expansion. The result could be a new round of failures. It is to such matters that the Federal Reserve needs to give its attention.

    These tasks apart, the reputation of central bankers will be the greater, the less responsibility they assume. Perhaps they can lean against the wind - resist a little and increase rates when the demand for loans is persistently great, reverse themselves when the reverse situation holds.

    But, in the main, control must be - as it was in the United States during the war years and the good years following - over the forces which cause firms and persons to seek loans and not over whether they are given or not given the loans.

    -From "Money: Whence it came, Where it went" 1975 - pgs 305,6.

    anne -> RGC... , February 13, 2017 at 08:19 AM
    https://www.amazon.com/Money-Whence-Came-Where-Went/dp/0735100705

    1975

    Money: Whence it came, Where it went
    By John Kenneth Galbraith

    RC AKA Darryl, Ron said in reply to RGC... , -1
    Excellent! THANKS!

    [Feb 13, 2017] Of course, powerful forces don't want gummit meddling' in their business and support a lot of propaganda to prevent that. They like the idea of an 'independent Fed that stays away from industrial policy. And they can spend a lot of cash to promote their message in media and with politicians and experts .

    Notable quotes:
    "... Independence from those possessing collaterable assets or independence from the electorate? ..."
    "... Just trying to state my views. I think the Fed is undemocratic and I like to say so now and again. ..."
    "... My alternative would be to quit pretending that the Fed could manage the economy. I think fiscal policy is much more determinant. I would like to see a general understanding by the public that the president is responsible for economic results and should be held accountable. ..."
    Feb 13, 2017 | economistsview.typepad.com
    RGC :, February 13, 2017 at 08:02 AM
    The Fed is part of a system run by private banks. That means policy is dictated by those possessing collaterable assets. Who wins and who loses that game?
    kthomas -> RGC... , February 13, 2017 at 08:09 AM
    Trump has no clue. He will recommend either a complete idiot or somebody from his friends at Sachs. All they seem to talk about is raising rates. Once the economy starts to sputter, it will transform into lowering the rates.

    The real issue is what Thoma mention: Independence. The Fed has no meaning and no purpose without it.

    RGC -> kthomas... , February 13, 2017 at 08:24 AM
    Independence from those possessing collaterable assets or independence from the electorate?

    The Fed has already started raising rates.

    kthomas -> RGC... , February 13, 2017 at 08:41 AM
    Now you're trolling, comrade.
    Peter K. -> kthomas... , February 13, 2017 at 08:45 AM
    No you're trolling. The "independent" Fed recently gave us the worst recovery on record.

    8 years of 1.7 percent growth? No wonder Trump won.

    You stupid troll.

    Mike S -> Peter K.... , February 13, 2017 at 09:24 AM
    "8 years of 1.7 percent growth? No wonder Trump won."

    IMO, that's due more to (the lack of) Fiscal policy than monetary policy. If the (do nothing) republican congress was interested in things like rebuilding infrastructure while the black guy was president, we could have had a higher GDP rate.

    But rather than do what was in the best interest of the country, they'd rather see mediocre growth than give Obama a victory.

    RGC -> kthomas... , February 13, 2017 at 09:17 AM
    Just trying to state my views. I think the Fed is undemocratic and I like to say so now and again.
    Mike S -> RGC... , February 13, 2017 at 09:33 AM
    Undemocratic? Well, probably, but there are lots of things in our government which are undemocratic. The FTC, for example, exists of people appointed by the president. Is that democratic?

    To me, it's analogous to the Winston Churchill quote, "Democracy is the worst form of government, except for all the others."

    I'd be interested in an alternative proposal.

    Mike S -> Mike S... , February 13, 2017 at 09:34 AM
    And, just for the record, I am not a troll. It just happens that I live under a bridge. ;)
    pgl -> Mike S... , February 13, 2017 at 09:53 AM
    Now that is funny!
    Peter K. -> pgl... , February 13, 2017 at 01:21 PM
    What's funny is that you think the Fed did a better job from 1980 to the present day than it did from 1949-1979.

    People can look things up on the Internet.

    You can't just lie all of the time about everything.

    RGC -> Mike S... , February 13, 2017 at 11:02 AM
    Yes, there are others and separation of powers makes it difficult to assess blame.

    My alternative would be to quit pretending that the Fed could manage the economy. I think fiscal policy is much more determinant. I would like to see a general understanding by the public that the president is responsible for economic results and should be held accountable.

    Of course, powerful forces don't want "gummit meddling' in "their business" and support a lot of propaganda to prevent that. They like the idea of an 'independent" Fed that stays away from industrial policy. And they can spend a lot of cash to promote their message in media and with politicians and "experts".

    I would like to see John Kenneth Galbraith raised from the dead and pontificating again, or his substitute (see John Kenneth Galbraith on Monetary Policy above)

    [Feb 13, 2017] Under Maestro Greenspan Fed as an institution became this sense not so dissimilar to such post WWII financial institutions as IMF and World Bank (which became the key instruments for implementing Washington consensus ). It became a very effective enforcer of the neoliberalization of the country.

    Feb 13, 2017 | economistsview.typepad.com
    llisa2u2, February 13, 2017 at 10:34 AM
    Just finished reading a great little book, THE ECONOMIC PINCH, by C.A.Lindbergh, SR. Here's a link to it: https://archive.org/stream/nkooan_yahoo_Lind/Lind#page/n1/mode/2up

    Yes, the writing style is a bit dated, but it gives the bottom-line in really clear, well-written English.

    It's a GREAT little book, should be required reading with proof by some book report written by each economist, before their being allowed any public discussion about the FEDERAL RESERVE.

    It's probably more relevant today for all U.S. citizens than it was back in the early 1900's.

    Sanjait, February 13, 2017 at 11:10 AM
    The Great Moderation era Fed has some good aspects but has fundamentally failed to understand how its obsession with keeping inflation from ever even thinking abut going up has suppressed wages and caused labor hysteresis.

    I think they assume that all those problems just equilibriate away across the cycle but the reality is not that.

    So definitely it could and should be better.

    But .. that doesn't make every proposal to change it a good one, or even a coherent one. Nor does it justify the attitude that we should just blow everything up and hope something better happens. Those bad arguments are what got us Trump, and at no point should reasonable people pander to such bad arguments, or confuse the fact that bad arguments are widely held with the notion that they aren't bad.

    libezkova : February 13, 2017 at 03:07 PM , 2017 at 03:07 PM
    Fed independence was always a convenient fiction. This is an independence limited to implementing neoliberal policies.

    http://www.levyinstitute.org/pubs/wp_625.pdf

    Which was done under "Maestro" Greenspan. This Ann Rand follower and staunch believer in unrestrained "free market" (which means the law of jungles) subverted the institution and pressured the Presidents who deviated from the "Party line" (and one time Bill Clinton tried). This is the extent he was a Maestro. Later, after 2008, Maestro turned into cornered rat, but this is quite another story.

    Under Maestro Greenspan Fed as an institution became not so dissimilar to such post WWII financial institutions as IMF and World Bank (which became the key instruments for implementing "Washington consensus"). It became a very effective enforcer of the neoliberalization of the country.

    http://www.mit.edu/~thistle/v13/2/imf.html

    [Feb 12, 2017] Trump is now assigned to be as designated scapegoat for all blunders of three previous neoliberal administrations by three Deep State wholly-owned subsidiaries: Bloomberg, NYT and Wapo

    Notable quotes:
    "... Bloomberg, like WaPo and NYT, is "a wholly-owned subsidiary of the Deep State" ..."
    "... Thank God they stopped their Putin-did-it nonsense. Now they have found something new along the lines Trump-did-it. Both those attempts to control the narrative are false and dishonest. ..."
    "... I understand that Trump is now assigned to be as designated scapegoat for all blunders of three previous neoliberal administrations. ..."
    Feb 12, 2017 | economistsview.typepad.com

    im1dc : February 12, 2017 at 07:44 PM

    The Tax stuff is maybe, this is happening now

    https://www.bloomberg.com/news/articles/2017-02-12/america-s-biggest-creditors-dump-treasuries-in-warning-to-trump

    "America's Biggest Creditors Dump Treasuries in Warning to Trump"

    by Brian Chappatta...February 12, 2017...5:00 PM EST

    > Japanese investors cull U.S. government debt by most since '13

    > Currency-hedged returns were worst on record last quarter

    "In the age of Trump, America's biggest foreign creditors are suddenly having second thoughts about financing the U.S. government.

    In Japan, the largest holder of Treasuries, investors culled their stakes in December by the most in almost four years, the Ministry of Finance's most recent figures show. What's striking is the selling has persisted at a time when going abroad has rarely been so attractive. And it's not just the Japanese. Across the world, foreigners are pulling back from U.S. debt like never before.

    From Tokyo to Beijing and London, the consensus is clear: few overseas investors want to step into the $13.9 trillion U.S. Treasury market right now. Whether it's the prospect of bigger deficits and more inflation under President Donald Trump or higher interest rates from the Federal Reserve, the world's safest debt market seems less of a sure thing -- particularly after the upswing in yields since November. And then there is Trump's penchant for saber rattling, which has made staying home that much easier.

    "It may be more difficult than usual for Japanese to invest in Treasuries and the dollar this year because of political uncertainty," said Kenta Inoue, chief strategist for overseas bond investments at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. "Treasury yields may rise rapidly again in the near future, which will continue to discourage them from buying aggressively."

    Nobody is saying that foreigners will abandon Treasuries altogether. After all, they still hold $5.94 trillion, or roughly 43 percent of the U.S. government debt market. (Though that's down from 56 percent in 2008.) A significant drawdown can harm major holders like Japan and China as much as it does the U.S.

    And, of course, homegrown demand has of late been able to absorb the pickup in overseas selling..."

    libezkova -> im1dc...
    im1dc,

    Here is the link https://www.bloomberg.com/amp/news/articles/2017-02-12/america-s-biggest-creditors-dump-treasuries-in-warning-to-trump )

    Bloomberg, like WaPo and NYT, is "a wholly-owned subsidiary of the Deep State"

    Thank God they stopped their Putin-did-it nonsense. Now they have found something new along the lines Trump-did-it. Both those attempts to control the narrative are false and dishonest.

    I understand that Trump is now assigned to be as designated scapegoat for all blunders of three previous neoliberal administrations.

    But can you please ask yourself two very simple questions:

    1. Who and how accumulated that much debt?
    2. Who did run the wars of neoliberal empire expansion to the tune of five trillion dollars?

    Was it Trump?

    I would greatly appreciated if you can answer them in the reply to this post. Or, even better, make some pause in posting neoliberal propaganda.

    [Feb 12, 2017] Half of US finance is parasitic

    Approximately nine percent of U.S. GDP is finance of that probably three to five percent is useful for allocating capital and the rest is preying on asymmetric information
    Notable quotes:
    "... asymmetric information, and the recent illuminating example of Wells Fargo's excellence in pushing products that customers did not want nor need. ..."
    "... Approximately 9 percent of U.S. GDP is finance. Some economists argue that probably 3-5 percent is useful for allocating capital, storing value, smoothing consumptions, and creating competition, and the rest is preying on asymmetric information ..."
    "... When vendor expects deflation he dumps inventory, but when he expects inflation he holds on to inventory as he waits for higher profit margins to arrive. He holds onto merchandise by simply raising prices. But why do economists advertise the reverse mechanism? Why does the status quo have a need for distorting truth? ..."
    "... Inflation is offered to the proles as a substitute for tax relief to the impoverished. Do you see how it works? ..."
    Feb 12, 2017 | economistsview.typepad.com

    Choco Bell -> Ed Brown... February 12, 2017 at 07:50 AM , 2017 at 07:50 AM

    asymmetric information, and the recent illuminating example of Wells Fargo's excellence in pushing products that customers did not want nor need.

    BY: Some financial "innovation" is faddish. It does not create value.

    GR: Approximately 9 percent of U.S. GDP is finance. Some economists argue that probably 3-5 percent is useful for allocating capital, storing value, smoothing consumptions, and creating competition, and the rest is preying on asymmetric information
    "
    ~~Guy Roinik~

    Do you see how this asymmetric information plays out?

    It is the retail vendor who keeps better information than the retail customer. It is the vendor's expectations of disinflation vs inflation rather than the customer's expectations that control the change in M2V. Got it?

    When vendor expects deflation he dumps inventory, but when he expects inflation he holds on to inventory as he waits for higher profit margins to arrive. He holds onto merchandise by simply raising prices. But why do economists advertise the reverse mechanism? Why does the status quo have a need for distorting truth?

    Inflation is offered to the proles as a substitute for tax relief to the impoverished. Do you see how it works?

    " Tax relief for the wealthy will give you delicious inflation. Now jump for it! " ~~The Yea Sayers~

    Jump, Fools, Jump

    [Feb 12, 2017] Austerity The History of a Dangerous Idea

    See also Mark Blyth--"Liberalisms' great trick has been to naturalize very difficult political contests."
    Feb 12, 2017 | www.amazon.com

    Selected as a Financial Times Best Book of 2013

    Governments today in both Europe and the United States have succeeded in casting government spending as reckless wastefulness that has made the economy worse. In contrast, they have advanced a policy of draconian budget cuts--austerity--to solve the financial crisis. We are told that we have all lived beyond our means and now need to tighten our belts. This view conveniently forgets where all that debt came from. Not from an orgy of government spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. Through these actions private debt was rechristened as government debt while those responsible for generating it walked away scot free, placing the blame on the state, and the burden on the taxpayer.

    That burden now takes the form of a global turn to austerity, the policy of reducing domestic wages and prices to restore competitiveness and balance the budget. The problem, according to political economist Mark Blyth, is that austerity is a very dangerous idea. First of all, it doesn't work. As the past four years and countless historical examples from the last 100 years show, while it makes sense for any one state to try and cut its way to growth, it simply cannot work when all states try it simultaneously: all we do is shrink the economy. In the worst case, austerity policies worsened the Great Depression and created the conditions for seizures of power by the forces responsible for the Second World War: the Nazis and the Japanese military establishment. As Blyth amply demonstrates, the arguments for austerity are tenuous and the evidence thin. Rather than expanding growth and opportunity, the repeated revival of this dead economic idea has almost always led to low growth along with increases in wealth and income inequality. Austerity demolishes the conventional wisdom, marshaling an army of facts to demand that we austerity for what it is, and what it costs us.

    Metallurgist TOP 1000 REVIEWER on April 20, 2013 Format: Hardcover Vine Customer Review of Free Product ( What's this? )

    An interesting Keynesian view of the current EU austerity programs

    " I found this to be a very interesting and thought provoking book. The author makes his viewpoint very clear with the book's subtitle "The History of a Dangerous Idea". The essence of the author's argument is that austerity is unfair because it makes workers pay for the mistakes of banks, and even more importantly, dangerous because it does not lead to prosperity, but only to decreased economic growth and increased unemployment. This thesis is backed up by an analysis of the banking crisis of 2008, how it spread from the US to the EU, why the single currency Euro has made the problem worse for the EU and why using austerity to solve the problems will not work. It also discusses the history of the idea of austerity, both in terms of the economic theory that promotes it and the economic history that does not. Conservatives, who find Keynesian economics to be not only wrong, but also the road to economic ruin, will likely be turned off by the book's subtitle and many of the arguments that Professor Blyth utilizes. However, there is a lot of data in this book that they should look at, if only to criticize it. I found this book very enlightening and while I do not agree with all of Professor Blyth's ideas (particularly those of the last chapter), I learned a lot, so for me it was 5-stars.

    What is in the book?
    The book is divided into 7 chapters, which cover the following:

    Chapter 1 - A Primer on Austerity. This is a short chapter that summarizes the main thesis of the book (mentioned above), and sets the stage for the more detailed discussions in subsequent chapters.

    Chapter 2 - America: To Big to Fail? This is an excellent chapter that summarizes the origins and unfolding of the 2008-banking crisis in the US. This is a very complicated story, which Professor Blyth tells in a clear manner. The story revolves around repurchase agreements (Repos), mortgage backed securities (MBS), collateralized debt obligations (CDO), credit default swaps (CDS), and how all these interacted in a climate of deregulation to produce the crisis. Professor Blyth does a good job of explaining these terms and how the interaction worked.

    Chapter 3 - Europe: Too Big to Bail? This is another very illuminating chapter. It shows how Europe, which first believed it was not going to be affected by the US banking crisis, became a major casualty of it and their own internal banking problems. All these factors were compounded by the single currency Euro, which has removed devaluation as a solution to the crisis, instead fostering the idea that governmental austerity was the only way to correct a problem produced by the private banking sector.

    Chapter 4 - Intellectual History of a Dangerous Idea 1692-1942. This chapter goes back to the writings of John Locke, David Hume and Adam Smith to see how the idea of austerity developed. It also covers the idea in the early 20th century and the development of anti-austerity Keynesian economic theory. It is a nice primer on classical economic ideas.

    Chapter 5 - Intellectual History of a Dangerous Idea 1942-2012. This chapter carries the story of the idea of austerity into the present time. It shows how the idea of austerity, discredited by the Great Depression and the success of the Keynesian solution (although conservatives would argue these successes were illusory and set the stage for future economic problems), has been resurrected by economists writing in the latter part of the 20th century and early 21st.

    Chapter 6. Austerity's Natural History 1914-2012. Blyth presents a lot of data that shows that, contrary to the theories presented in the previous chapter, austerity has not worked in practice. Much of the chapter is spent it refuting the writings of several economists that say that the recent historical data does support the idea. Blyth contends that in general it does not and if is does in a few cases it either does not when all the data is considered, or worked only marginally under a very limited set of conditions.

    Chapter 7 - The End of Banking, New Tales and a Taxing Time Ahead. This is a very short eleven-page chapter, but perhaps the most controversial on in the book. Blyth, initially a supporter of bank bailouts as absolutely necessary to prevent a complete collapse of the banking system and with it the whole capitalist economic system and with it democratic society as a whole, now questions whether in might not have been better to let the banks fail. He cites the case of Iceland where the banks were allowed to fail and society has recovered. This was done by making the bank's creditors bear the cost of failure, instead of all of Iceland's citizens. He notes that most of this loss was borne by foreign creditors of a very small country, whose banking system was an immense part of the country's economy, but was small compared to the economies of the US or the EU. Unfortunately, he fails to say how a banking collapse in the US or EU could be handled when the systems are huge compared to Iceland's and where the creditors are largely internal. He does not explain how the failure of these huge banking systems, with their internal creditors, would not result in the scenario he originally envisioned. I found this analysis to be poor and not in keeping with the thoroughness of the rest of the book. Blyth also floats the idea of huge tax increases, either through a one-time tax on assets or a very large increase in higher bracket tax rates. Conservatives, and many not quite so conservative, will likely blanch at these ideas. There is no discussion of the political difficulties of doing this or very much development of the idea, which is contained in only the last four pages of the book.

    David Lindsay on September 25, 2016 Format: Paperback Verified Purchase
    Brilliant Overview

    " Mark Blyth is a professor at Brown University and he explains why austerity doesn't work. He points out that whenever austerity has been tried in the past it has usually proven to be disastrous. What its supporters often seem to forget is that one person's spending is another's income and demand in the economy would collapse if everyone stopped spending. The book is a sobering read because Blyth is not optimistic about the future. However, the book is well written and is often funny.

    Blyth shows that the case for austerity does not add up. The US did not pursue austerity during the recession and its economy has been growing. US GDP is 10% higher than it was in 2007. The EU has pursued austerity with vigor, but GDP in the euro zone is still lower than it was in 2007. Blyth shows that countries that cut the most have had lower rates of growth. Blyth claims that all the countries that cut public spending in response to the financial crises had significantly more debt in 2012 than when they started. For example, Ireland's debt to GDP ratio more than quadrupled, from 24.8% in 2007 to 106.4% in 2012. The other problem is that austerity increased unemployment. Throughout southern Europe, unemployment has been at levels not seen since the Great Depression. It is still over 20% in Spain and Greece. As a result of cutting public expenditure Greece's GDP dropped by 30% in four years. There is no evidence that austerity improves growth.

    Blyth spends a lot of time trashing the pro-austerity thinking that took place in Europe. Germany is driving economic policy for the euro zone and they have never believed in Keynesian economics. Keynes advised that austerity was a bad idea during a recession. German politicians seem to believe that all nations could have trade surpluses if only they tried hard enough, despite the fact that it is impossible for all countries to have a surplus. Only one European country can be Germany. The Germans have often advocated the sort of solutions that failed in the 1930s. They argue that budget deficits and government debt have to be kept under strict control. The Maastricht Treaty, which established the EU, required that national debt should not exceed 60% of GDP and the deficit should not exceed 3.0%. Entry to the euro also requires a budget deficit of 3.0%.

    Blyth points out that when you have a deficit, you can either raise taxes or cut spending to fill the gap. The British government of David Cameron favored the latter in 2010. The British deficit had reached 10% in 2010. However, UK government debt went up, not down, despite the cuts, from 52.3% of GDP in 2009 to 90.7% in 2013. The same pattern was repeated throughout the euro zone. Cutting public expenditure shrank the underlying economy.

    The German argument is that running large deficits increases the risk of high inflation. Blyth points out that the Germans have selective amnesia about their past. It was the Wall Street Crash in 1929 not hyper-inflation in 1924 that led to Hitler. Before the crash, 1.25 million people were unemployed in Germany. Hitler was an accidental Keynesian and by 1937 German unemployment had fallen from six million to one million. Unfortunately, much of his spending involved preparing for war. Blyth argues that Germany's continuing insistence on austerity is the biggest threat to the euro zone.

    According to Blyth, the current version of the austerity argument was created by a group of Italian economists, originating from Bocconi University, in Milan. He explains why their arguments are deeply flawed. Blyth argues that, apart from Greece, public sector debt in the euro zone countries was not out of control before the financial crises. Blyth rubbishes the theory of "expansionary austerity," that cutting spending will lead to higher economic growth. The "austerians" believed that large spending cuts would be followed by expansion rather than contraction. The reason, they suggested, was that decisive fiscal austerity created confidence in the private sector. Keynesians agreed that insufficient private spending was the cause of the problem, but only governments could stimulate demand on the scale needed. Austerity failed to stimulate demand in Europe. Blyth also argues that everybody cannot cut their way to growth at the same time. The IMF once went along with austerity but it has recently concluded that austerity has had major adverse economic effects.

    Blyth is worried that inequality could become a serious problem in the US. The 400 richest Americans own more assets than the poorest 150 million. He argues that both major parties have written off the bottom 30% of society. He claims that the American working class has not had a pay rise since 1979, and globalization has failed them. He believes this explains the anger behind the Trump phenomenon. Blyth points out that rich Americans and the country's biggest companies are reluctant to pay tax, so government borrowing has had to go up. Blyth claims that he pays more tax than GE.

    Blyth is critical of Republicans who advocated austerity. Republicans in the US also favored balancing the budget and cutting taxes. Keynesians, like Paul Krugman, argued that this is what Herbert Hoover tried to do in the early 1930s and the result was a 25% unemployment rate. Obama inherited an 11.4% budget deficit in 2009. The Republicans wanted to cut government expenditure but Blyth argues the reason the US has recovered faster than Europe is because it cut less. He makes it clear that it is poorer people who usually rely on government services to make ends meet that are the hardest hit when public expenditure is cut. He believes that the rich and corporate America need to start paying more tax. He also argues that the US government should probably have let its banks go bankrupt – as the Icelandic government did – rather than bail them out.

    Blyth reminds us that 2008 was a private sector crisis. The debts of the banks landed on the balance sheet of the public sector through bank bailouts and quantitative easing. In other words, taxpayers bailed out the bankers. He calls this the "greatest bait-and-switch in modern history." The EU is imposing austerity on southern Europe and dismantling the welfare state in Greece in order to protect German banks that made stupid decisions.

    Blyth in recent interviews has argued that the EU may have a sinister agenda and it really wants to drag wages in Western Europe down to East European levels so that it can better compete with China. I assumed this must be an exaggeration but it might not be. The Guardian mapped labor costs across the euro zone from 1999 to 2013. What they found is that German workers have barely seen wages rise for that 14-year stretch, despite Germany having massive trade surpluses. We could be in for real trouble.

    Fang on September 27, 2016 Format: Paperback Verified Purchase
    The Richness of Austerity

    " Mark Blyth tries to convey a simple message: austerity simply does not work. Defining austerity as "voluntary deflation in which the economy adjusts through the reduction of wages, prices and public spending to restore competitiveness .best achieved by cutting the state's budget, debts and deficits" (p.2), Blyth argued that austerity's fallacies lies in the impossibility of having everybody to be thrift at the same time and the cyclical nature of debt (pp.7 and 12).

    Blyth also suggests that austerity efforts unevenly hurt the lower strata of societies (p.8), and conflates debt and financialization problems in private sector (primarily referring to bank and financial institutions) into state (sovereign) issues (p.6 and p.23). In the first three chapters, Blyth strives to demonstrate that the financial and economic turmoil since 2008 is largely a crisis of financialization, lack of regulation, slow growth and imbalance between monetary policy and final creditor of printing press (in the case of Europe), not that of austerity (save the marginal case of Greece). Blyth argues that it is a mentality of treating these crises as endogenous and private actors as "rational" that underlay the bad policy choices in America and Europe (pp.91-93).

    In chapters 4 through 6, Blyth provides an intellectual and practical history of austerity. It is suggested that a spirit of thrift and aversion towards state and state spending runs through the vein of economic liberalism, ranging from classical liberalism to neoclassical economics and to the Austrian school. In more contemporary era, it is public choice theory, neoliberalism and Milton Friedman's monetarism that carries this tradition forward to construct a pro-market and private-sector-favoring package that turns public spending into a corporate calculation of costs and benefits. Blyth goes on to illustrate the history of austerity in practice, arguing that it is usually the Keynesian expansionary policies that couple austerity that reinvigorated economy amid crises; austerity, carried out on its own, constitutes massive redistribution consequences.

    Blyth obviously attempts to engage as wide an audience as possible in the public intellectual realm. As much as he is successful in his empirical chapters, Blyth appears to fight a deflationary economic policy with his own inflationary writing strategy. From chapters 4 to 5, he constantly conflates the moral teaching of thrift and financial prudence from Adam Smith to avoidance of debt, the Ordoliberalism's quest for order and proper state function to aversion of democratic politics, the methodological insights of public choice to a general fear of bureaucracy and government, and so on. These inflations, while sometimes credited, are bound to subject to scrutiny and questions.

    Moreover, by glossing over the details of this rich intellectual history, Blyth dodges some key questions that his empirical chapters also fail to articulate: what is the distinction between private and public debt, and personal thrift and public austerity, when we talk about austerity, and how significant is it? How does this distinction play out in more classical economic philosophy?

    And amid crisis, who should be considered the "ultimate creditor" or "final guarantor" of debt (and money)? There questions certainly exceeds the scope and intention of Blyth's book, but they should be instrumental in deepening our understanding of austerity.

    [Feb 12, 2017] The CIA as Organized Crime How Illegal Operations Corrupt America and the World

    Notable quotes:
    "... By illuminating CIA programs and systems of surveillance, control, and assassination utilized against the civilian population of South Vietnam, we are presented with parallels with operations and practices at work today in America's seemingly perpetual war against terror. ..."
    "... Through the policies of covert infiltration and manipulations, illegal alliances, and "brute force" interventions that wreak havoc on designated enemy states, destroy progress and infrastructure under the claim of liberation, degrade the standards of living for people in the perceived hostile nations, "...America's ruling elite empowers itself while claiming it has ensured the safety and prestige of the American people. Sometimes it is even able to convince the public that its criminal actions are 'humanitarian' and designed to liberate the people in nations it destroys." ..."
    "... Want to know why the DEA is losing the war on drugs, how torture has become policy? Want to know why the government no longer represents your interests? Look no further. ..."
    Feb 12, 2017 | www.amazon.com
    Alan Dale on November 27, 2016

    5.0 out of 5 stars An Essential Addition to an Essential Body of Work

    Of the extraordinarily valuable and informative works for which Mr. Valentine is responsible, his latest, CIA As Organized Crime, may prove to be the best choice as an introduction to the dark realm of America's hidden corruptions and their consequences at home and around the world. This new volume begins with the unlikely but irrevocable framework by which Mr. Valentine's path led to unprecedented access to key Agency personnel whose witting participation is summarized by the chapter title: "How William Colby Gave Me the Keys to the CIA Kingdom."

    By illuminating CIA programs and systems of surveillance, control, and assassination utilized against the civilian population of South Vietnam, we are presented with parallels with operations and practices at work today in America's seemingly perpetual war against terror.

    Through the policies of covert infiltration and manipulations, illegal alliances, and "brute force" interventions that wreak havoc on designated enemy states, destroy progress and infrastructure under the claim of liberation, degrade the standards of living for people in the perceived hostile nations, "...America's ruling elite empowers itself while claiming it has ensured the safety and prestige of the American people. Sometimes it is even able to convince the public that its criminal actions are 'humanitarian' and designed to liberate the people in nations it destroys."

    Mr. Valentine has presented us with a major body of work which includes: The Strength of the Wolf; The Strength of the Pack; The Pheonix Program, to which we may now add The CIA as Organized Crime, and for which we are profoundly indebted.

    felixnola on December 6, 2016

    5.0 out of 5 stars The Truth About the CIA and What is Instore For You

    If you want the inside scoop on the CIA and it's criminal past; this is the book. Additionally, why the Phoenix Program is pertinent for our own times. This book connects the dots.

    If you have been wondering why Homeland Security has fusion centers; why the USA Anti-Patriot Act, NDAA and Rex 84 have been passed by Congress; you will get your answer here.

    A book every intelligent American needs to read and place in a prominent place in their library. Oh, and don't forget after you read it; spread the word !!! (this book is based upon actual face to face interviews and documents)

    Jay Trout on January 2, 2017

    5.0 out of 5 stars A crucial tool to understanding present reality. An absolute must read.

    Run, don't walk, and get yourself a copy of this book. The author has been warning us for decades about the clear and present danger that is the CIA. I was unaware of Valentine's work for most of those years, perhaps because our media outlets (even the "anti-establishment" ones like Democracy Now and The Intercept) have been compromised. Valentine's work has been suppressed since his ground-breaking book on the Phoenix Program.

    Not that I didn't know anything about the sordid history. I knew about MK-Ultra, some of the agency's drug running and empire-building exploits. This work goes much deeper and paints a much bigger picture. The extent of the agency's influence is much greater than I had imagined.

    This is not another history book about dirty tricks. It is not just about our insane foreign policy and empire building. The cancer of corruption, of outright crime, has metastasized into every agency of the government right here in the US itself. Those dirty tricks and crimes have become domestic policy- in fusion centers and Homeland Security, in the militarization of local police and in Congress, from Wall Street to Main Street. Border Patrol, the DEA, Justice and State have all been compromised.

    Want to know why the DEA is losing the war on drugs, how torture has become policy? Want to know why the government no longer represents your interests? Look no further.

    The problem is now. We are the new targets.

    Read it and weep, but for God's sake, please read it.
    A highly informative and comprehensive book, and a scathing, fearless indictment of government corruption.
    I cannot overstate it's importance.

    Andrew E. Belshaw on December 6, 2016

    Disguising Obama's Dirty War Chapter 22

    I just picked up this book and have not read it yet--but I am writing this to CORRECT THE RECORD regarding very basic information.

    There are 446 PAGES (not 286, as listed above). 160 Pages is a big difference--obviously, QUALITY is more important than quantity--but I do feel the listing needs be corrected.

    The "Inside Look" feature is also cutting off the last 9 chapters of the book, which are as follows:

    Chapter 16: Major General Bruce Lawlor: From CIA Officer in Vietnam to Homeland Security Honcho

    Chapter 17: Homeland Security: The Phoenix Comes Home to Roost

    PART IV: MANUFACTURING COMPLICITY: SHAPING THE AMERICAN WORLDVIEW

    Chapter 18: Fragging Bob Kerrey: The CIA and the Need for a War Crimes Tribunal

    Chapter 19: Top Secret America Shadow Reward System

    Chapter 20: How Government Tries to Mess with Your Mind

    Chapter 21: Disguising Obama's Dirty War

    Chapter 22: Parallels of Conquest, Past and Present

    Chapter 23: Propaganda as Terrorism

    Chapter 24: The War on Terror as the Greatest Covert Op Ever

    John C. Landon on January 2, 2017

    Expose of the CIA mafia

    This is a devastating and must-read study of the social and political calamity created by the CIA over the last sixty years. The portrait shows the criminal character of the agency and finally of the government it is said to serve. The portrait is a double shock because it shows not just a sordid corruption but a malevolent 'dark side' mafia-style corruption of american civilization and government. That the CIA controls the drug trade is not the least of the stunning revelations of this history.

    [Feb 12, 2017] It would be an understatement to say that Dems adopted the neoliberal ideology of their opposition

    Notable quotes:
    "... We're hoping for judges' consciences, and loyalty to country over party, and common sense, to save us. ..."
    "... "administration that is unconstrained by conscience and logic", we have had that continuously since 1980. ..."
    "... You get worked up over a travel ban but not Obama's US bombing wedding parties. Or taking out 14 non combatants and losing n MV 22 to get a few smart phones. ..."
    "... Do you have stock in both refugee referral companies and Lockheed? ..."
    "... poor pk has grabbed the alt right's the concession over cognitive bias, false analogy and cherry picked faux facts. ..."
    "... Does anyone take this guy seriously anymore? This is Chicken Little, Sky-Is-Falling nonsense from a PhD Nobelist? Certainly the guy has lost his marbles, and someone needs to put him in a padded room. At least be kind, and retire him. ..."
    "... Electoral college exists until "they" gut/get rid of states rule on amendments in the US constitution. ..."
    "... Why republicans should be focused on voter suppression, if Democrats are working relentlessly to move blue collar workers and lower middle class voters to far right ? ..."
    "... 'dollar democracy' is deeper than that. ..."
    "... Wrong. Progressive neoliberals helped give us Trump. Nobody forced Hillary to give speeches to Goldman Sachs or to give Bush a blank check for war. ..."
    "... Blaming the few who didn't vote Hillary. What about the many who stayed home? You're an example of learned helplessness. Like the wife who won't leave her abusive husband. ..."
    "... If Trump got 37% of votes of people with postgraduate degree that's tell you something about Democratic Party. That only can means that Democratic Party smells so badly that most people can not stand it, not matter what is the alternative. As in "you should burn in hell". ..."
    "... It's kind of reversal of voting for "lesser evil" on which Bill Clinton counted when he betrayed the working class and lower middle class. Worked OK for a while but then it stopped working as he essentially pushed people into embraces of far right. ..."
    "... I doubt that Trump is a political cycle outlier. He is a sign of the crisis of neoliberal political system, which pushes authoritarian figures as "Hail Mary Pass", when Hillarius politicans are proved to be un-electable. ..."
    "... And despite his "bastard liberalism" he is the symbol of rejection of liberalism, especially outsourcing/offshoring and neoliberal globalization. Or more correctly his voters are. ..."
    "... "America as we know it will soon be gone." Don't you think that much of it is already gone? We did not see ourselves as a nation of cowards years ago, but that's what we now appear to be. ..."
    "... "We did not see ourselves as a nation of cowards years ago, but that's what we now appear to be." USAnians have been cowards for generations. The transition from corporatist dyarchy to one-party authoritarianism is and was inevitable. ..."
    "... It seems we live in a system where two parties fight to a draw and then volatility in the system acts as a coin toss and we get new leadership. The people line up approximately half and half for the two. ..."
    "... Where do you see a draw? The republicans control the house, the senate, the executive branch, the majority of state legislatures, the majority of state governorships, and will soon control the supreme court. ..."
    "... The Republicans have embraced the idea that this is a battle, and that their 50% need to win and keep their heels on the neck of the other 50%. The Democrats seem more conflicted about this fight, partly because some of them have bought the neoliberal ideology of their opposition. ..."
    "... "some of them have bought the neoliberal ideology of their opposition." i like the understatement. ..."
    Feb 12, 2017 | economistsview.typepad.com
    yuan -> DeDude... , February 10, 2017 at 09:49 AM
    "The real question is how much support he has a year from now when most of his voters realize that the majority of what he directly or implicitly promised them, turns out to be a lie."


    I'm sure that people in Kansas were telling themselves this 7 years ago.

    DeDude -> yuan... , February 10, 2017 at 12:52 PM
    Yep - and they were right. The democrats lost the next midterm election. The midterm blowback is that of both an energized opposition and of a lot of disappointed followers.
    ilsm -> DeDude... , February 10, 2017 at 04:04 PM
    If the libruls think Obama's multinational collateral damage from senseless bombing by drone and expensive aircraft is not worth protesting, then rallies and faux moral indignation against a travel ban are incongruous to reason.
    sanjait -> Estate Agent - Emily ... , February 10, 2017 at 10:31 AM
    "It's not quite that bad."

    We can only hope.

    But we have an administration that is unconstrained by conscience and logic and a GOP majority in both houses of Congress that shows scant willingness to stand against the administration on anything.

    The only remaining check between now and 2018 is the fear Congresspersons might have of losing their seats, and the judiciary.

    The former is very weak though, because rapid Trump supporters make up the majority of the GOP voting base, so GOP congressmen are going to stay in line to avoid primary challenges. Their party is almost completely captured by the wingnut wing.

    Also, few at-risk GOP Senators are even up for re-election in 2018.

    The latter is our only real hope, and even that is tenuous. Judges can be fickle and peculiar, but most GOP judges were selected for their partisan loyalty. Most will go along with almost anything the GOP wants, and as time passes, Trump is going to add more judges, and he will be damn sure to pick ones that go along with anything he wants.

    We're hoping for judges' consciences, and loyalty to country over party, and common sense, to save us. But when the GOP picks judges they select against those traits.

    ilsm -> sanjait... , February 10, 2017 at 04:08 PM
    "administration that is unconstrained by conscience and logic", we have had that continuously since 1980.

    You get worked up over a travel ban but not Obama's US bombing wedding parties. Or taking out 14 non combatants and losing n MV 22 to get a few smart phones.

    Do you have stock in both refugee referral companies and Lockheed?

    ilsm : , February 10, 2017 at 04:09 AM
    poor pk has grabbed the alt right's the concession over cognitive bias, false analogy and cherry picked faux facts.
    Benedict@large -> ilsm... , February 10, 2017 at 05:04 AM
    Does anyone take this guy seriously anymore? This is Chicken Little, Sky-Is-Falling nonsense from a PhD Nobelist? Certainly the guy has lost his marbles, and someone needs to put him in a padded room. At least be kind, and retire him.
    RC AKA Darryl, Ron -> Benedict@large... , February 10, 2017 at 05:30 AM
    You certainly cannot expect Krugman to criticize the constitutional political system of dollar democracy that gave us a choice between Trump and Hillary through first past the post elections and party caucuses any more than you can expect him to criticize lifetime congressional seats and a SCOTUS unanswerable to the people.

    I believe even Krugman will criticize gerrymandering, which is a safe target since it is implemented at the state rather than federal level.

    pgl -> RC AKA Darryl, Ron... , February 10, 2017 at 05:59 AM
    DeLong is - at least when it comes to the Electoral College. This system is sort of telling the folks in California that they really do not matter.
    ilsm -> pgl... , February 10, 2017 at 06:10 AM
    Electoral college exists until "they" gut/get rid of states rule on amendments in the US constitution.

    Democracy is one thing within toen lesser in states........ the rest is republic the 'burgs' not wanting to be run from Morningside Hts.

    RC AKA Darryl, Ron said in reply to pgl... , February 10, 2017 at 06:12 AM
    The electoral college although problematic is not the best place to start. Campaign finance, gerrymandering, legislative term limits, and an alternative to first past the post voting are all state to state neutral, allowing a large and powerful electoral consensus to form without undue obstacles except for elite authority itself.

    These are all assessable solidarity issues. The fear of reversal for Roe V. Wade makes petition and referendum to overturn SCOTUS decisions more difficult first time around, but not impossible since Citizens United. Liberals on the fence only need consider the polling numbers comparing those two SCOTUS decisions to see that petition and referendum to overturn SCOTUS would not threaten Roe V. Wade, but rather end the threat to Roe V. Wade. OTOH, the electoral college is a state by state issue and small states are not going to give it up. New York and California will need to subdivide into a bunch of small states to ever change that.

    The constitutional ratification procedure can be hijacked by a solidarity electoral movement only so long as the solidarity is large and cohesive.

    yuan -> RC AKA Darryl, Ron... , February 10, 2017 at 08:39 AM
    And, IMO, you are not seeing the forest for the trees. The republican party is laser focused on voter suppression. And they will not waste a crisis or supreme court judge slot.

    http://www.chicagotribune.com/news/nationworld/politics/ct-north-carolina-voter-id-law-20160902-story.html

    "A review of these documents shows that North Carolina GOP leaders launched a meticulous and coordinated effort to deter black voters, who overwhelmingly vote for Democrats."

    When the Supreme court becomes un-deadlocked Jim Crow will destroy opposition to Trumpism.

    RC AKA Darryl, Ron -> yuan... , February 10, 2017 at 09:27 AM
    You are certainly correct in their intent and if the South less Virginia, which was purple enough to go for Hillary in 2016, were the entire country then you would be correct in the impending reality.

    The reality is uncertain though because many of the Trump voters were racists and misogynists, but then many of the Trump voters were just reacting to an opportunity to strike back at the corporatist hegemony in control of the political establishment. The corporatist controlled dollar democracy has dominated the conversation about the advantages of trade regardless of trade deficits for over thirty years now. A rebellion is long overdue. The US Constitution provides sufficient political tools to the electorate to stage a revolution using electoral means, but not by just choosing between establishment political parties without providing an electoral agenda of its own along with solidarity in imposing bipartisan anti-incumbency sanctions for failure to perform.

    yuan -> RC AKA Darryl, Ron... , February 10, 2017 at 09:42 AM
    "The US Constitution provides sufficient political tools to the electorate to stage a revolution using electoral means"

    And I see a mostly corrupt legal system that has already proven willing to overturn the will of the people.

    sanjait -> RC AKA Darryl, Ron... , February 10, 2017 at 10:39 AM
    Great. While Trump tries to tear down democracy, the supposed representatives of "the people" will keep talking about shit like how much they hate NAFTA.
    ilsm -> sanjait... , February 10, 2017 at 04:16 PM
    I won't type much here:

    https://www.youtube.com/watch?v=Sk3sURDS4IA

    The opening rif is cool.

    Monster, Steppenwolf

    I need to play this once a week!

    libezkova said in reply to yuan... , February 10, 2017 at 07:57 PM
    "And, IMO, you are not seeing the forest for the trees. The republican party is laser focused on voter suppression."

    With all due respect, I do not believe that.

    Why republicans should be focused on voter suppression, if Democrats are working relentlessly to move blue collar workers and lower middle class voters to far right ?

    ilsm -> RC AKA Darryl, Ron... , February 10, 2017 at 04:13 PM
    'dollar democracy' is deeper than that.

    it is 99% the system

    but you got to do the right system

    or the left one

    trouble is like tamany

    cannot see the system to fix

    ken melvin : , February 10, 2017 at 05:22 AM
    Paul Krugman didn't give us Trump, the progressives who can't stand dems, demonized Hillary, either didn't vote or voted for Trump gave us Trump. Idee fixe and big picture are not the same.
    Peter K. -> ken melvin... , February 10, 2017 at 05:38 AM
    Wrong. Progressive neoliberals helped give us Trump. Nobody forced Hillary to give speeches to Goldman Sachs or to give Bush a blank check for war.

    "We're re-learning today what we should have learned in the 30s ... economic stagnation breeds reaction and intolerance"

    http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2017/02/lets-not-debate-immigration.html

    Blaming the few who didn't vote Hillary. What about the many who stayed home? You're an example of learned helplessness. Like the wife who won't leave her abusive husband.

    yuan -> Peter K.... , February 10, 2017 at 08:56 AM
    "Wrong. Progressive neoliberals helped give us Trump. Nobody forced Hillary to give speeches to Goldman Sachs or to give Bush a blank check for war."

    How many Goldman Sachs banksters does Trump have in his administration? I lost count.

    The best predictor of a Trump vote was a tendency towards sexism and racism. And Trump voters were generally well-off middle class whites, not the underclass who either stayed home or predominantly voted for Clinton.

    Peter K. -> yuan... , February 10, 2017 at 09:09 AM
    "The best predictor of a Trump vote was a tendency towards sexism and racism. And Trump voters were generally well-off middle class whites, not the underclass who either stayed home or predominantly voted for Clinton."

    Trump won the uneducated vote. Many of those people ain't middle class.

    "How many Goldman Sachs banksters does Trump have in his administration? I lost count."

    Yeah they own both parties. Democrats need to be for the people, not corporations. You are pretty naive for being leftwing. Probably you just get off on being argumentative.

    yuan -> Peter K.... , February 10, 2017 at 09:38 AM
    "Trump won the uneducated vote. Many of those people ain't middle class." I see you are pimping Trump's faux-populist mythology again. Clinton won the majority of votes of those earning less the $50,000 and Trump won the majority of votes for those who earn more than $50,000.

    http://www.cnn.com/election/results/exit-polls

    Peter K. -> yuan... , February 10, 2017 at 11:55 AM

    high school or less [18 percent of total]

    Clinton 46 %
    Trump 51 %

    some college [32% of total]

    Clinton 43%
    Trump 51%

    college graduate [32%]
    Clinton 49%
    Trump 44%

    postgraduate [18%]
    Clinton 58%
    Trump 37%

    yuan -> Peter K.... , February 10, 2017 at 05:49 PM
    has it ever occurred to you that older white voters can be middle/upper class without having a college degree?

    it's ironic that many of these same people oppose unions, social insurance (e.g. pensions), and free education (GI bill) despite having benefited from these socialist programs.
    FYIGM

    libezkova said in reply to Peter K.... , February 10, 2017 at 08:05 PM
    If Trump got 37% of votes of people with postgraduate degree that's tell you something about Democratic Party. That only can means that Democratic Party smells so badly that most people can not stand it, not matter what is the alternative. As in "you should burn in hell".

    It's kind of reversal of voting for "lesser evil" on which Bill Clinton counted when he betrayed the working class and lower middle class. Worked OK for a while but then it stopped working as he essentially pushed people into embraces of far right.

    RC AKA Darryl, Ron said in reply to pgl... , February 10, 2017 at 06:16 AM
    My wife says Liz Warren will run in 2020 and win. I am hoping that it will be someone off radar now that gets elected as the youngest POTUS in history. We need a sea change with full millennial backing.
    Jay -> RC AKA Darryl, Ron... , February 10, 2017 at 06:32 AM
    You're wife's prediction for next president will keep DeVos.

    "A taxpayer-funded voucher that paid the entire cost of educating a child (not just a partial subsidy) would open a range of opportunities to all children. . . . Fully funded vouchers would relieve parents from the terrible choice of leaving their kids in lousy schools or bankrupting themselves to escape those schools.

    the public-versus-private competition misses the central point. The problem is not vouchers; the problem is parental choice. Under current voucher schemes, children who do not use the vouchers are still assigned to public schools based on their zip codes. This means that in the overwhelming majority of cases, a bureaucrat picks the child's school, not a parent. The only way for parents to exercise any choice is to buy a different home-which is exactly how the bidding wars started.

    Under a public school voucher program, parents, not bureaucrats, would have the power to pick schools for their children-and to choose which schools would get their children's vouchers."

    Remember which side of the debate is pro-choice and which side of the debate is pro teacher's union.

    RC AKA Darryl, Ron said in reply to Jay... , February 10, 2017 at 09:38 AM
    I am not for either side. My wife's mother was a teacher as was her older sister. I am not sure what she thinks of the teacher's union.

    The pedagogical system is so oriented to a system of establishment indoctrination that the average private school is just as bad as the average public school and even the worst public schools are no worse than the worst private schools. Only the best private schools stand out along with a few of the charter schools as better than their public school counterparts and even then not by a great margin. The problem is the pedagogical approach itself. It is also a matter of who taught the teachers? We have developed a system that aspires to mold us all into obedient followers and it works very well. It is also self-replicating.

    ilsm -> RC AKA Darryl, Ron... , February 10, 2017 at 04:26 PM
    Putting up "competition" against public education which as evolved since the Northwest Ordinance is a crusade for the tea party.

    But they would trip WW III, war to keep Russia from breaking up the Frankensteins of East Europe!

    The system is: who makes money.

    yuan -> Jay... , February 10, 2017 at 10:02 AM
    "Remember which side of the debate is pro-choice and which side of the debate is pro teacher's union."

    Who needs labor and civil rights when we have capitalist billionaires who will give us "school choice vouchers", "right to work laws", and "deregulation"!

    sanjait -> RC AKA Darryl, Ron... , February 10, 2017 at 10:47 AM
    Complaining about the electoral college being screwed up is like complaining that human nature is screwed up.

    It's true, but almost pointless, because it won't change in the foreseeable future.

    libezkova said in reply to RC AKA Darryl, Ron... , February 10, 2017 at 08:11 PM
    I doubt that Trump is a political cycle outlier. He is a sign of the crisis of neoliberal political system, which pushes authoritarian figures as "Hail Mary Pass", when Hillarius politicans are proved to be un-electable.

    And despite his "bastard liberalism" he is the symbol of rejection of liberalism, especially outsourcing/offshoring and neoliberal globalization. Or more correctly his voters are.

    Peter K. -> The People's Pawn... , February 10, 2017 at 06:19 AM
    Trump said the Iraq war was a disaster. He bragged about being against the war before it started. He used the Iraq war against Jeb Bush and Hillary as an example of the corrupt elite's incompetence.

    This infuriates thoughtless partisans like Krugman to no end.

    The appellate court ruled against Trump's Muslim band even more strongly than the lower court judge.

    sanjait -> Peter K.... , February 10, 2017 at 10:55 AM
    "Trump said the Iraq war was a disaster. He bragged about being against the war before it started."

    That is a very sneaky way of talking around the fact that Trump never said anywhere on record before the war that he was against it.

    wally : , February 10, 2017 at 06:20 AM
    "America as we know it will soon be gone." Don't you think that much of it is already gone? We did not see ourselves as a nation of cowards years ago, but that's what we now appear to be.
    yuan -> wally... , February 10, 2017 at 09:13 AM
    "We did not see ourselves as a nation of cowards years ago, but that's what we now appear to be." USAnians have been cowards for generations. The transition from corporatist dyarchy to one-party authoritarianism is and was inevitable.
    ilsm -> wally... , February 10, 2017 at 04:36 PM
    poor pk's [whatever it is] America is not my [or a lot of peoples'] America. America like freedom is a perspective thing!
    point : , February 10, 2017 at 06:41 AM
    It seems we live in a system where two parties fight to a draw and then volatility in the system acts as a coin toss and we get new leadership. The people line up approximately half and half for the two.

    I'm having a hard time understanding why if half support the new leadership established by the operations of the system, that we should worry this a threat to the system itself.

    For if that's what we think, it seems we have far bigger problems than simple disagreement to worry about. It seems those among us who think that way should be planning as revolutionaries to change this doomed system that except for luck has not yet careened over the edge into whatever.

    yuan -> point... , February 10, 2017 at 09:33 AM
    Where do you see a draw? The republicans control the house, the senate, the executive branch, the majority of state legislatures, the majority of state governorships, and will soon control the supreme court.
    Julio -> point... , February 10, 2017 at 10:41 AM
    The Republicans have embraced the idea that this is a battle, and that their 50% need to win and keep their heels on the neck of the other 50%. The Democrats seem more conflicted about this fight, partly because some of them have bought the neoliberal ideology of their opposition.
    yuan -> Julio ... , February 10, 2017 at 12:23 P
    "some of them have bought the neoliberal ideology of their opposition." i like the understatement.

    [Feb 12, 2017] T he british welfare state, the war on poverty/great society policy era, and the scandinavian social model are not replacements for capitalism. They are forms of capitalism

    Feb 12, 2017 | economistsview.typepad.com
    yuan -> Jim Harrison ... , February 10, 2017 at 12:34 PM
    "Does anybody around here have anything useful to suggest"
    both demonstration and general strikes are powerful ways to express popular outrage. one is planned on for the 17th (too soon) and another more organized one is being planned for march.

    http://f17strike.com/

    "but you have no more of an idea of a global replacement for capitalism"


    so the british welfare state, the war on poverty/great society policy era, and the scandinavian social model are unpossible pipe dreams because...

    Jim Harrison -> yuan... , February 10, 2017 at 01:46 PM
    "the british welfare state, the war on poverty/great society policy era, and the scandinavian social model are" not replacements for capitalism. They are forms of capitalism. And the sorts of policies that go with these versions of conventional social democracy are...pretty much the platform articles that Clinton ran on. Which is the serious reason the American right despised Hillary. They, at least, didn't have any trouble telling the candidates apart.

    There are two problems with storming the Winter Palace. First, you won't have a decisive majority of Americans behind you. Second, you have no idea what you'd do if somehow did seize the Winter Palace. You could conceivably solve the first problem by going balls out demagogue a la Hugo Chavez; but, like Chavez, you'd have to dispense with democracy to keep power because you have no solution to the second problem. For my money, a decent social democracy-universal healthy care, more progressive taxes, a higher minimum wage, more affordable college education, etc.- is plenty hard enough to secure.

    yuan -> Jim Harrison ... , February 10, 2017 at 04:50 PM
    "They are forms of capitalism."

    Before the long-decline began in the 70s, a large fraction of the UK's economic activity was chartered, regulated, and/or managed for the people. That's not capitalism, by definition. (Socialism was a market/trade-based system at its inception. The tendencies with alternative economic models came later.)

    Some history:
    https://en.wikipedia.org/wiki/Clause_IV

    And Corbyn has returned labor to its socialist roots: http://www.independent.co.uk/news/uk/politics/jeremy-corbyn-to-bring-back-clause-four-contender-pledges-to-bury-new-labour-with-commitment-to-10446982.html


    "And the sorts of policies that go with these versions of conventional social democracy are...pretty much the platform articles that Clinton ran on."


    I guess I missed Clinton advocating for the nationalization of health care, education, energy production, and transportation.

    And the "welfare state" has little to do with "social democracy" (whatever that recent nonsense phrase means), all of them were developed by socialist movements.

    [Feb 12, 2017] An Alleged Muslim Spy Ring - Is This Why Rex Tillerson Cleaned House

    Feb 12, 2017 | www.zerohedge.com

    kavlar , Feb 11, 2017 10:27 PM

    What about this SPY RING?

    "I want Netanyahu to begin telling the truth, what the involvement of Israel was in 9/11. Over 134 Mossad operatives were picked up on 9/11. The FBI picked them up [and] debriefed them." - Dr. Steve Pieczenik, Former Deputy Assistant Secretary of State.

    nmewn -> Arnold , Feb 12, 2017 6:00 AM

    As I understand it, these "IT experts" also worked on Debbie Wassername-Schultz's computers. Oh no nmewn, what the hell can you possibly be thinking?! Clearly, beyond any shadow of a doubt... The Russians did it! ;-)

    nmewn -> Arnold , Feb 12, 2017 7:00 AM

    They are definitely trying to quash this one as it goes against most (if not all) false narratives they've created for public consumption.

  • False Narrative: Hillary was the more competent candidate! - No, she purposely setup & ran an unsecured personal network and used it for government business.
  • False Narrative: The Russians hacked the DNC! - No, according to the dims own sources a phishing email was clicked on that could have been sent by anyone.
  • ... ... ...

    WeekendAtBernankes -> ThanksChump , Feb 12, 2017 10:42 AM

    Oldest brother had two years of experience getting paid 157k/yr. Median salary for IT Admin in Congress: 50k. He was highest paid person of all his (Democrat) Rep's staffers, including her Chief of Staff. The question is how and why? Were they all employed as a political favor in return for a large donation from anyone in particular? This should be investigated further.

    http://congressional-staff.insidegov.com/l/43573/Jamal-M-Awan

    Mementoil -> kavlar , Feb 12, 2017 7:07 AM

    So... an Islamic spy ring is allegedly acting at the highest echelons of the federal government, and "American" commentators on ZH are hammering about Israel??? I'm calling bluff on you guys.

    You are not American patriots, and you don't belong to the right.

    You are a bunch of paid shills, working to white wash Islamic Jihad and obfuscate the ongoing war which Islam is waging against the west:

    http://www.frontpagemag.com/fpm/132010/arab-nations-hire-10-new-pr-agenc...

    Fathead Slim -> Mementoil , Feb 12, 2017 8:07 AM

    Oy vey, Avi. You came out and blew your cover after only 9 weeks? That was really dumb of you.

    Mementoil -> Fathead Slim , Feb 12, 2017 11:03 AM

    I don't have any "cover". I have already announced openly that I'm an Israeli. So what? I still seem to care about American interests more than most people in this forum.

    Kayman -> finametrics , Feb 12, 2017 10:59 AM

    Today's Israel exists on a foundation of Western guilt about German's murdering Jews in WWII.

    As time has passed Israel has become what the Germans were. And for the most part, they are blind to that fact.

    groaner -> kavlar , Feb 12, 2017 10:04 AM

    I think a lot of stuff on 9/11 towers is misdirection.. This is the best examination of the evidence that disproves and eliminates a lot of what we think we know!

    https://www.youtube.com/watch?v=vadSaWyiozg&t=82s

    [Feb 12, 2017] US Budgetary Costs of Wars through 2016 are close to five trillioins

    Feb 12, 2017 | economistsview.typepad.com
    ken melvin : , February 10, 2017 at 07:43 AM

    The FBI overheard The over reaction to 9/11, greatly abetted by the media, marked the beginning of this slide into Stasi-land. The associated paranoia has led to the likes of Trump and this goofy arsed Congress. We now have governance based not on reality, but on paranoia; on evidence free facts, on convenient facts, on alternative facts, to each of us our own facts. I've seen no accounting of the economic and social costs of this paranoia, but am certain they exceed the damage of 9/11 by orders of many magnitude.

    Are these symptoms of America's undeniable demise? How do we turn the ship of state around? This precedent set by the election of Trump, how does the nation remove the stain? Can we avoid the continuance into despotism, authoritarianism?

    anne -> anne... , February 10, 2017 at 08:29 AM
    http://watson.brown.edu/costsofwar/files/cow/imce/papers/2016/Costs%20of%20War%20through%202016%20FINAL%20final%20v2.pdf

    September, 2016

    US Budgetary Costs of Wars through 2016: $4.79 Trillion and Counting
    Summary of Costs of the US Wars in Iraq, Syria, Afghanistan and Pakistan and Homeland Security
    By Neta C. Crawford

    Summary

    Wars cost money before, during and after they occur - as governments prepare for, wage, and recover from them by replacing equipment, caring for the wounded and repairing the infrastructure destroyed in the fighting. Although it is rare to have a precise accounting of the costs of war - especially of long wars - one can get a sense of the rough scale of the costs by surveying the major categories of spending.

    As of August 2016, the US has already appropriated, spent, or taken on obligations to spend more than $3.6 trillion in current dollars on the wars in Iraq, Afghanistan, Pakistan and Syria and on Homeland Security (2001 through fiscal year 2016). To this total should be added the approximately $65 billion in dedicated war spending the Department of Defense and State Department have requested for the next fiscal year, 2017, along with an additional nearly $32 billion requested for the Department of Homeland Security in 2017, and estimated spending on veterans in future years. When those are included, the total US budgetary cost of the wars reaches $4.79 trillion....

    ilsm -> anne... , February 10, 2017 at 04:52 PM
    The pentagon and congress are spending the US to disarmament.

    While congress spent $4.8T directly on the wars they spent at least $9T more on the usual stuff for the military industry complex troughers.

    pk's observation about a shoot out with a small PLA Navy unit made me laugh.

    In one of those China would be in complete control!

    anne -> anne... , February 10, 2017 at 08:39 AM
    America has been continually at war since 2001, at war under 2 presidents, at war in a range of countries that were in no way connected to the attack on America and did not threaten America. Tensions were building even with Russia and China. We have now the possibility of ending our warring or working to mutual advantage with China and Russia, which will be to the advantage of many countries.

    China and America have just moved to the forming of a new mutually beneficial partnership. I find reason to be hopeful.

    [Feb 12, 2017] Instead of the endless perception management or strategic communication or psychological operations or whatever the new code words are, you could open up the files regarding key turning-point moments and share the facts with the citizens

    Notable quotes:
    "... This bizarre feature of Trump's executive order shows how deep Official Washington's dysfunction goes. Trump has picked a major constitutional battle over a travel ban that targets the wrong countries. ..."
    "... But there's a reason for this dysfunction: No one in Official Washington can speak the truth about terrorism without suffering severe political damage or getting blacklisted by the mainstream media. Since the truth puts Israel and especially Saudi Arabia in an uncomfortable position, the truth cannot be spoken. ..."
    "... There was some hope that President Trump – for all his irascibility and unpredictability – might break from the absurd "Iran is the principal source of terrorism" mantra. But so far he has not. Nor has Trump moved to throw open the files on the Syrian and Ukraine conflicts so Americans can assess how the Obama administration sought to manipulate them into supporting these "regime change" adventures. ..."
    "... But Trump has resisted intense pressure to again entrust U.S. foreign policy to the neoconservatives, a number of whom lost their jobs when President Obama left office, perhaps most significantly Assistant Secretary of State for European Affairs Victoria Nuland, who helped orchestrate the violent overthrow of Ukraine's elected president and is an architect of the New Cold War with Russia. ..."
    "... Other neocons who angled for jobs in the new administration, including John Bolton and James Woolsey, have failed to land them. Currently, there is pressure to ensconce Elliott Abrams, a top neocon dating back to the Reagan administration, in the key post of Deputy Secretary of State but that idea, too, has met resistance. ..."
    "... The neocon threat to Trump's stated intent of restoring some geopolitical realism to U.S. foreign policy is that the neocons operate almost as an ideological cabal linked often in a subterranean fashion – or as I. Lewis Libby, Vice President Dick Cheney's neocon chief of staff, once wrote in a cryptic letter to neocon journalist Judith Miller that aspen trees "turn in clusters, because their roots connect them." ..."
    "... What is less clear is whether Trump, Tillerson and his fledgling State Department team have the intellectual heft to understand why U.S. foreign policy has drifted into the chaos and conflicts that now surround it – and whether they have the skill to navigate a route toward a safe harbor. ..."
    "... My first concern, however, is the USA predilection for 'regime change" wars - and for that I blame the neocons. ..."
    Feb 12, 2017 | economistsview.typepad.com
    RGC : February 10, 2017 at 06:44 AM

    If you wanted to bring sanity to a U.S. foreign policy that has spun crazily out of control, there would be some immediate steps that you – or, say, Secretary of State Rex Tillerson – could take, starting with a renewed commitment to tell the truth to the American people.

    Instead of the endless "perception management" or "strategic communication" or "psychological operations" or whatever the new code words are, you could open up the files regarding key turning-point moments and share the facts with the citizens – the "We the People" – who are supposed to be America's true sovereigns.

    For instance, you could release what the U.S. government actually knows about the Aug. 21, 2013 sarin gas attack in Syria; what the files show about the origins of the Feb. 22, 2014 coup in Ukraine; what U.S. intelligence analysts have compiled about the July 17, 2014 shoot-down of Malaysia Airlines Flight 17 over eastern Ukraine. And those are just three examples of cases where U.S. government propagandists have sold a dubious bill of goods to the American and world publics in the "information warfare" campaign against the Syrian and Russian governments.

    If you wanted to base U.S. foreign policy on the firm foundation of reality, you also could let the American people in on who is actually the principal sponsor of the terrorism that they're concerned about: Al Qaeda, Islamic State, the Taliban – all Sunni-led outfits, none of which are backed by Shiite-ruled Iran. Yet, all we hear from Official Washington's political and media insiders is that Iran is the chief sponsor of terrorism.

    Of course, that is what Saudi Arabia, the Gulf states and Israel want you to believe because it serves their regional and sectarian interests, but it isn't true. Saudi Arabia and the Gulf states are the ones arming and financing Al Qaeda and Islamic State with Israel occasionally bombing Al Qaeda's military enemies inside Syria and providing medical support for Al Qaeda's Syrian affiliate operating near the Golan Heights.

    The reason for this unsavory network of alliances is that Israel, like Saudi Arabia and the Sunni-led Gulf states, sees Iran and the so-called "Shiite crescent" – from Tehran through Damascus to Beirut – as their principal problem. And because of the oil sheiks' financial wealth and Israel's political clout, they control how pretty much everyone in Official Washington's establishment views the Middle East.

    But the interests of Israel, Saudi Arabia and the Gulf states are not in line with the interests of the American people – nor the average European – who are not concerned about militant Shiites as much as militant Sunnis. After all, the worst terror attacks on Europe and the U.S. have come from Sunni extremists belonging to or inspired by Al Qaeda and Islamic State.

    This gap between the reality of Sunni-extremist terrorism and the fantasy of Official Washington's "group think" fingering Shiite-ruled Iran explains the cognitive dissonance over President Trump's travel ban on people from seven mostly Muslim countries. Beyond the offensive anti-Muslim prejudice, there is the fact that he ignored the countries that produced the terrorists who have attacked the U.S., including the 9/11 hijackers.

    This bizarre feature of Trump's executive order shows how deep Official Washington's dysfunction goes. Trump has picked a major constitutional battle over a travel ban that targets the wrong countries.

    But there's a reason for this dysfunction: No one in Official Washington can speak the truth about terrorism without suffering severe political damage or getting blacklisted by the mainstream media. Since the truth puts Israel and especially Saudi Arabia in an uncomfortable position, the truth cannot be spoken.

    There was some hope that President Trump – for all his irascibility and unpredictability – might break from the absurd "Iran is the principal source of terrorism" mantra. But so far he has not. Nor has Trump moved to throw open the files on the Syrian and Ukraine conflicts so Americans can assess how the Obama administration sought to manipulate them into supporting these "regime change" adventures.

    But Trump has resisted intense pressure to again entrust U.S. foreign policy to the neoconservatives, a number of whom lost their jobs when President Obama left office, perhaps most significantly Assistant Secretary of State for European Affairs Victoria Nuland, who helped orchestrate the violent overthrow of Ukraine's elected president and is an architect of the New Cold War with Russia.

    Other neocons who angled for jobs in the new administration, including John Bolton and James Woolsey, have failed to land them. Currently, there is pressure to ensconce Elliott Abrams, a top neocon dating back to the Reagan administration, in the key post of Deputy Secretary of State but that idea, too, has met resistance.

    The neocon threat to Trump's stated intent of restoring some geopolitical realism to U.S. foreign policy is that the neocons operate almost as an ideological cabal linked often in a subterranean fashion – or as I. Lewis Libby, Vice President Dick Cheney's neocon chief of staff, once wrote in a cryptic letter to neocon journalist Judith Miller that aspen trees "turn in clusters, because their roots connect them."

    In other words, if one neocon is given a key job, other neocons can be expected to follow. Then, any Trump deviation from neocon orthodoxy would be undermined in the classic Washington tradition of strategic leaking to powerful media and congressional allies.

    So far, the Trump inner circle has shown the administrative savvy to avoid bringing in ideologues who would dedicate their efforts to thwarting any significant change in U.S. geopolitical directions.

    What is less clear is whether Trump, Tillerson and his fledgling State Department team have the intellectual heft to understand why U.S. foreign policy has drifted into the chaos and conflicts that now surround it – and whether they have the skill to navigate a route toward a safe harbor.

    https://consortiumnews.com/2017/02/09/trumps-foreign-policy-at-a-crossroads/

    Julio -> RGC... , February 10, 2017 at 09:04 AM
    Very good analysis.
    The first and obvious question about the ban is "why isn't Saudi Arabia included"? As the article shows, this question unravels this (Trump's) current version of dysfunctional foreign policy based on misleading the public.
    RGC -> Julio ... , February 10, 2017 at 09:43 AM
    Yes, Trump seems to want to act directly but he also seems to often be off-target.

    My first concern, however, is the USA predilection for 'regime change" wars - and for that I blame the neocons.

    sanjait said in reply to RGC... , February 10, 2017 at 10:56 AM
    I am all for transparency but very strongly opposed to asinine conspiracy theories.
    RGC -> sanjait... , February 10, 2017 at 11:29 AM
    Why should anyone care? Maybe you should actually learn something about a topic before you comment on it.

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

    [Feb 12, 2017] Bill Gale of the Brookings Institution made this remarkable endorsement of the destination-based border-adjustment tax -- It essentially makes the government a shareholder in every corporation in America. The government shares all the losses, and it shares all the profits

    Feb 12, 2017 | economistsview.typepad.com
    Peter K. -> pgl... February 11, 2017 at 06:52 PM

    , 2017 at 06:52 PM

    http://www.nationalreview.com/corner/444689/liberals-love-border-adjusted-tax

    Liberals Can't Wait for Republicans to Adopt the Border-Adjusted Tax

    by VERONIQUE DE RUGY February 7, 2017 4:25 PM

    I have already expressed some of my objections with the border-adjusted tax included in the otherwise very good House Republican's Tax Blueprint. But I think it is important to revisit the utter enthusiasm of liberals at the prospect of a Republican Congress implementing a Destination Based Cash Flow Tax (DBCFT).

    Exhibit number 1: This article in the U.S. edition of The Independent called "Deluded Republicans are accidentally pushing for progressive corporation tax reform." It reads:

    "Indeed, we find ourselves in the paradoxical situation where a reform being presented by deluded right-wing American politicians as a way of sticking it to cheating foreigners actually represents the world's best chance for lancing the boil of rampant tax evasion by multinational companies. . . .

    But the great advantage of this reform is that it would eliminate the incentive for multinational firms to dodge their US corporate taxes through accounting tricks, such as registering profits at subsidiaries abroad and relocating their corporate headquarters to tax havens.

    No matter where they based their headquarters, multinationals would be liable for a hefty US tax bill if they sold plenty of products and services in America."

    This is correct. No matter how high the rate goes (as I we will see below under a Democratic Congress and White House, it could go high), companies will have nowhere to go and will lose their escape valves, i.e., they will be stuck with "a hefty US tax bill." That's what tax harmonization does. Dan Mitchell has a good speech here about how the DBCFT undermines tax competition.

    According to the author, the best part of the tax plan is that other governments will copy it and the bad system will be imposed everywhere. Tax competition gives you a virtuous cycle of countries adopting better and cheaper tax systems to compete with other countries. Under a destination-based border-adjustment regime, you instead get tax harmonization and a vicious cycle that spreads a bad system everywhere. He concludes:

    "Back to the paradox. Republicans care little about the iniquities of tax havens. They want firms to pay more in corporation tax in the same way that Donald Trump wants judges in Washington to influence immigration policy. And they seem terribly confused about the reform they are championing and about what it would entail, not least the progressive outcomes.

    Yet, for all that, what they have ended up pushing is the right thing, not just for the US but the world. Treason or not, we should wish them good speed on this one."

    Exhibit number 2: At a recent Tax Foundation event on the issue, Bill Gale of the Brookings Institution made this remarkable endorsement of the destination-based border-adjustment tax. He said (at the 43:40 mark): "It essentially makes the government a shareholder in every corporation in America. The government shares all the losses, and it shares all the profits."

    You can tell from the video that Douglas Holtz-Eakin is obviously uncomfortable with his comments. He even says something to the effect of "are you trying to kill it?"

    But then it gets better. Gale then reiterated his call for a much higher rate than the Republican plan's 20 percent. And as he said at the 45:33 mark, "If something is non-distortionary, you should tax the hell out of it." That has the merit of being honest and transparent.

    Now, never mind that a very likely less than perfect adjustment of our currency will actually create plenty of distortions in the form of, among other things, higher prices for consumers. And never mind that the adjustment of the currency itself will be painful and destroy a whole lot of wealth. But he is right that if there is no escape valve, then lawmakers are likely to try to tax the hell out of it.

    As I wrote last week:

    "When you think about it, it is not surprising that many, not all, liberals like the new tax idea."

    Republicans in Congress should think about this carefully.

    [Feb 12, 2017] Classicals vs Neoclassicals views on Tax and Rent

    Feb 12, 2017 | economistsview.typepad.com
    RGC : Reply Sunday, February 12, 2017 at 08:08 AM , February 12, 2017 at 08:08 AM
    Classicals or Neoclassicals - who you got?

    ...................
    Classicals vs Neoclassicals: Tax and Rent

    Posted on 8 January 2011

    At the university I attended, a few of the academics were strongly influenced by Classical Political Economy, especially that of Smith and Ricardo. Prior to my student days, one of them had published a paper in the Cambridge Journal of Economics entitled "On the origins of the term 'neoclassical'" (no free link available), which is quite well known in heterodox circles. In it, he argued that the 'classical' in the term 'neoclassical' is a misnomer and that neoclassical and classical economics actually have little in common, despite attempts by neoclassicals to claim Smith, in particular, as their forefather.

    The classical-influenced economists at my university happened to belong to the Sraffian School. This school attempts to synthesize Classical value and distribution with Keynesian output and employment determination, and is also known for its key role and victory in the Cambridge Capital Controversy. The school is named after Piero Sraffa, whose interpretation of Classical Political Economy, particularly Ricardo's work, has been highly influential.

    Sraffians are not the only modern-day economists influenced by Smith and Ricardo. Another prominent example is Michael Hudson. In a recent interview (h/t to Tom Hickey), Hudson discusses one big difference between the Classical economists and the neoclassicals: their analysis of taxation as applied to economic rent.

    Hudson touches on a number of noteworthy points during the interview. He draws attention to a historical correspondence that would probably surprise many, between high top tax rates and strong economic growth, and observes that the top rates were high in the period prior to WWII. Importantly, the focus of taxation in Classical Political Economy, which Hudson argues influenced US government policy in the late 1800s and much of the first half of the 1900s, was on confiscating economic rents. These rents include income that derives from ownership of assets that appreciate in value merely because of the growth in national income and/or improved public infrastructure, and not due to any participation in the production process (they arise especially in the real estate and financial sectors).

    It is not mentioned in the interview, but profit, of course, is also income that derives from the mere ownership of assets – the means of production. However, the classical economists were engaged in a class war with rentiers, not capitalists. It was Marx who drew this reasoning out to its logical conclusion, and this probably goes a long way to explaining why neoclassical theory, rather than being a continuation of classical economics (as was often claimed once it was established), was an escape into a different conceptualization of a capitalist economy that sought to reframe the distribution of income as the result of marginal contributions (an attempt that failed and was the chief target and theoretical casualty of the Cambridge Capital Controversy). Even so, there does remain a significant distinction between profit, which relates to assets employed in the production process, and economic rents. For this reason, Marx also distinguished between these two categories of income and spent a great deal of space in volume 3 of Capital analyzing the various forms of surplus value, including different types of rent.

    Hudson goes on to stress that the taxation imposed in the late 1800s and first half of the 1900s was highly progressive. Initially only the top 1 percent of income earners were required to submit tax returns. The purpose of this was to keep taxes on wages and profit low to promote price competitiveness against lower wage countries. This can be contrasted with neo-liberal policies of today which seem to be designed almost with the opposite intent: to tax wage and profit income (and also consumption) but provide loopholes or tax breaks for the recipients of economic rents.

    Above all, Hudson distinguishes between what the classical economists meant by the term "free market" and what that term has come to mean in the neo-liberal period. Hudson emphasizes that, for the classical economists, "free market" meant a market unencumbered by rent-based claims on income that would draw economic activity away from income production and toward speculation. The aim of the classical economists was to incentivize production. This is a very different notion than the neo-liberal one of labor-market "deregulation" (meaning regulation in favor of employers over employees), which is really just code for union smashing and an attack on real wages, or the neo-liberal deregulation of financial markets, which is a euphemism for enabling financial parasitism.

    Hudson makes another observation in passing. The observation is not central to his argument in the interview, but is relevant to current debates over deficits and public debt, and consistent with MMT. He notes that immediately prior to the commencement of the only extended period of high capitalist growth (WWII until the late 1960s), the US population was not in debt, and in fact had pent up savings from the war that it was waiting to spend.

    By little or no debt, Hudson clarifies that he means little or no private debt. There was, of course, a large public debt – larger as a percentage of GDP than the current US government "debt". This public debt did not matter, in spite of the familiar opposition to deficits and public debt, the echoes of which can be heard today, simply because the budget deficit shrinks endogenously once private-sector activity and income growth resume. This is precisely what happened in the immediate postwar period.

    Today, with the US government the monopoly issuer of its own flexible exchange-rate fiat currency, public "debt" is – or rather should be – even less of an issue. Unlike in the immediate postwar period, the government is not subject to the constraints of Bretton Woods or a similar commodity-backed money system. It is free to utilize its fiscal capacity to the extent necessary to restore full employment.

    Government "debt" is nothing other than the accumulated net financial wealth of the non-government. Once the non-government is ready to spend, income growth will deliver stronger revenues, reducing the deficit. But the private sector needs to have its debt under control before it will resume spending at levels sufficient to sustain strong economic growth.

    In addition to the absence of significant private debt at the end of WWII, there were other factors that contributed to the strong growth of the immediate postwar period, including Keynesian demand-management policies, a progressive tax system, and significant financial regulation. All these beneficial features of the economy were gradually undermined, and then exposed to outright attack from the 1970s onwards.

    Hudson discusses how, over time, much of the progressivity in the tax system was removed, paving the way for the construction of the inequitable and anti-productive monster of today. Keynesian demand-management policies were also largely eschewed throughout the neo-liberal era on the basis of an opportunistic misinterpretation of the stagflation of the 1970s. All this took place alongside deregulation of the financial sector and an aggressive dismantling of worker employment protections.

    The result of this neo-liberal policy mix was an increasing financialization and "rentification" of the economy, widening income inequality, and an adherence to fiscal austerity that directly corresponded, as a matter of accounting, to an unsustainable build up in the only US debt that matters – private debt – and culminated in the Global Financial Crisis and Great Recession.

    If the aim is to restore sustainable growth under capitalism (which is not my preferred social system, but presumably the one commanding the allegience of policymakers), the insights obtained from the classical economists in conjunction with the lessons of the postwar period would seem to suggest some combination of the following policy responses: tighter regulations of speculative activities; a more steeply progressive tax system targeted at the confiscation of economic rents and the incentivization of production and consumption; stronger worker protections; and the abandonment of the faulty construct of a 'government budget constraint' and a return to deficit expenditure sufficient to underpin non-government net saving and full employment.

    But the actual policy response has instead been to manipulate financial markets to engineer a massive transfer of wealth to the rentiers and exacerbate income and wealth inequality; to continue with the approach of taxing wage and profit income along with consumption rather than economic rents; and possibly even to revert foolishly to austerity while the private sector remains deeply indebted.

    http://heteconomist.com/classical-vs-neoclassical-economics-tax-and-rent/

    RGC -> RGC... , February 12, 2017 at 08:55 AM
    If you favor the neoclassicals, you also favor Paul Samuelson and the neo/new Keynesians- and today's mainstream economists.

    [Feb 12, 2017] VAT can be made less regressive by excluding essentials like non-prepared food bought at grocery stores and provide fixed rebate for lower income people

    Feb 12, 2017 | economistsview.typepad.com

    Jay -> Peter K.... February 12, 2017 at 10:25 AM

    Corporate income tax is an inefficient way to generate tax revenues. A) Large corps can avoid it and B) the incidence matters and I'm not sure we are always taxing who left-wingers think we are taxing (it is not who pays the tax but who bears the incidence of the tax that matters).

    VAT is much smarter and can be made less regressive A) exclude essentials like non-prepared food bought at grocery stores B) provide fixed rebate across the board.

    And at the end of the day even if VAT is on net "regressive" on the tax inflow side, remember that the benefits are "regressive" too, that is to say the people at the bottom of the income scale receive benefits that as a percentage of income are much much much higher than the well to do.

    Important note: I am all for cutting our military spending by say 50% (I know arbitrary number but it will certainly be Yuge). Bring the troops home and stop playing world police men. We shouldn't be militarily picking sides in Yemen or Syria. Offer humanitarian aid at a fraction of the cost.

    [Feb 12, 2017] Neoliberal economists themselves were largely responsible for the unpleasant political consequences typified by Trump and Brexit due to their efforts to promote globalization as stooges of financial oligarchy, who pays them

    Feb 12, 2017 | economistsview.typepad.com
    Floxo : February 11, 2017 at 01:11 PM

    , 2017 at 01:11 PM
    I originally tried to post this comment on Mainly Macro. It is in reply to some critical comments I received when I posted a comment suggesting economists themselves were largely responsible for the unpleasant political consequences typified by Trump and Brexit. I argued there has been a failure to properly communicate the serious distributional implications of trade and globalization. This has led people to become disillusioned with stagnant living standards and growing inequality. For some reason, my reply was disallowed, making it appear as though I had no answer to my critics. As my reply addresses issues of concern here I am hoping it will be published .

    Thankyou for your replies to my comment.

    Stéphane, I did not say trade gain arises from price convergence; neither do trade gains arise from differences in opportunity costs (I think that is what you meant). Trade gain can arise from several sources, these include relative differences in productive efficiency (Ricardian comparative advantage), differences in relative factor abundance (HO theory), from tradeable goods where production exhibits increasing returns to scale and from monopolistic competition (Krugman).

    When trade gain is exhausted it is possible to derive further gains from factor mobility. For example, shifting capital from a capital abundant region to a capital poor region will typically result in further gains. An example of this process is off-shoring, where a firm shifts production to another country where wages are lower and rent (the return on capital invested) is higher.

    So why are potential gains from globalization a problem? The challenge is the sheer size of the population industrializing from a very low capital base. Economically big regions with abundant labour and scarce capital mean low wages and high rents extending into the long term. For a developed economy, adopting a policy of free trade without capital controls with these regions will have two significant consequences:

    1. There is a trade induced shift to more capital intensive production driven by the factor advantage of having a relative abundance of capital. This lowers the domestic labour share of GDP.

    2. Capital abundance implies a capital drain as domestic saving is increasingly used to finance foreign investment in productive capacity, driven by the higher foreign return. This correspondingly lowers domestic investment which also slows growth. Labour now has less capital applied to it, reducing labour productivity and also wages.

    What are called "magnification effects" virtually guarantee wage earners are big losers in these scenarios, whereas, capital owners are big winners; hence the rise in inequality.

    The theoretical support for this view is very robust. I became interested in the debate when such effects showed up strongly in the numerical trade models I develop. Economists, generally, have not supported this basic theoretical perspective, preferring a grab bag of miscellaneous empirically based models. Rapid technological change, too little technological change, skills biased technological change, union demise, banks unwilling to lend, demographics, austerity, labour hoarding, financialization, shift in consumer preference to services and on and on. Personally, I prefer basic economic theory and regard all of these thought bubbles as garbage.

    In answer to Anonymous, it is true; many economists assert automation is the principle cause of our economic woes. This is theoretically baseless. I cannot describe a model of how technological improvement is supposed to give rise to the above effects, because no such model exists. Improved technology means we get more goods and services from the same resources of capital and labour, boosting growth and wages and rents.


    anne -> Floxo... , February 11, 2017 at 01:23 PM
    Where is the precise reference? Mainlymacro must however be separate as "mainly" and Macro" in posting the link.
    Floxo -> anne... , February 11, 2017 at 05:09 PM
    Thankyou Anne, here is the reference you requested.

    https://mainlymacro.blogspot.com.au/2017/01/why-voting-for-article-50-may-ruin-mps.html


    anne -> Floxo... , February 12, 2017 at 04:59 AM
    https://mainlymacro.blogspot.com.au/2017/01/why-voting-for-article-50-may-ruin-mps.html

    January 29, 2017

    Why voting for Article 50 * may ruin an MP's career

    The last time I did something like this was to urge Labour party members to vote for Smith rather than Corbyn, knowing full well that Corbyn was almost certain to win. Being proved right on that occasion is no consolation, because I would rather have been wrong. This is even more futile, but now as then I feel a decision is about to be made that is both disastrous and irreversible. I also want to say something about the longer term interests of MPs that I have not seen said elsewhere.

    There are so many principled reasons for MPs to vote against triggering Article 50. Let me summarise what I see as the main ones here, but this is far from comprehensive....

    * https://en.wikipedia.org/wiki/Article_50_of_the_Treaty_on_European_Union

    Article 50 of the Treaty on European Union is a part of European Union law that sets out the process by which member states may withdraw from the European Union.

    -- Simon Wren-Lewis

    anne -> anne... , February 12, 2017 at 05:01 AM
    Correcting:

    Mainlymacro can now be linked to directly. There is no need to separate "mainly" and "macro" in posting a link.

    anne -> Floxo... , -1
    Interesting response to an interesting argument. I am grateful for this post.
    libezkova -> anne... , February 12, 2017 at 10:34 AM
    I do not share your enthusiasm.

    A couple of points

    1. Neoliberal economists are stooges of financial oligarchy (much like Soviet economists were stooges of Communist Party) and if they do not promote Washington consensus on trade and globalization they would be ostracized and replaced by other no less talented puppets. They all are replaceable and they understand that perfectly well and behave accordingly. Being puppets they have no degrees of freedom to express the discontent with neoliberalism.

    2. The author himself is still in completely under the spell of neoclassical economic framework. that's why his critique is so superficial. As in "There is a trade induced shift to more capital intensive production driven by the factor advantage of having a relative abundance of capital. This lowers the domestic labour share of GDP. " What a "neoliberal speak." Reminds me 1984 Newspeak. That was a political decision to shift capital to developing countries in order to destroy union power and decimate "trade unionism" as political force opposing to neoliberalism. As simple as that.

    [Feb 12, 2017] Democratic Party Sugar High

    Feb 12, 2017 | economistsview.typepad.com
    Peter K. : February 11, 2017 at 07:05 AM , 2017 at 07:05 AM
    https://www.nytimes.com/2017/02/10/opinion/democratic-party-sugar-high.html

    Democratic Party Sugar High

    by Timothy Egan

    FEB. 10, 2017

    These are giddy times for the forces of reason and light. A surge of resistance to a bumbling and unstable president has sent millions of people into the streets, into the faces of politicians, and into bookstores to make best sellers again of authoritarian nightmare stories.

    And all of that hasn't changed the fact that Democrats, the opposition party, are more removed from power than at almost any point in history. Republicans control everything in Washington, two-thirds of state legislative chambers and 33 governor's mansions.

    Every day brings some fresh affront to decency, some assault on progress, some blow to the truth. The people who run the White House can't spell, can't govern, can't get through a news cycle without insulting an ally or defaming a cherished institution. Republicans just shrug and move on, in lock step with a leader who wants to set the country back a century. From their view, things are going swimmingly.

    Outraged about the ban on people from Muslim-majority nations? So what. About half of the nation, and a majority of Republicans, are in favor of it. Upset over the return of Wall Street pirates to power? President Trump's supporters aren't.

    Democrats haven't been able to stop a single one of Trump's gallery of ill-qualified, ethically challenged and backward-thinking cabinet appointees. His pick for labor secretary, Andrew Puzder, doesn't believe people should be paid a living wage to stir a milkshake, and he hired an undocumented immigrant to clean his house. He'll fit right in.

    Millions of reasonable people are appalled that a madman is in charge of the country. But tell that to Mitch McConnell when he cuts off the right of a fellow senator to speak. Or tell it to Paul Ryan when he can't find his copy of the Constitution he has sworn to uphold. These invertebrate leaders don't care if Trump's residence is a house of lies. They don't care that their president is a sexual predator, or that his family is using the office to enrich themselves. All they care about is the R stitched to his jersey.

    When Adlai Stevenson was told that all thinking people were with him in his race for president, he famously responded: "That's not enough. I need a majority."

    And so, too, do the Democrats. This week, the powerless party went into their winter cave for an annual retreat - three days of soul-searching and strategizing.

    "This is our moment in history," the House minority leader, Nancy Pelosi, told her fellow Ds. "This man in the White House is incoherent, incompetent and dangerous. And we have to protect children and other living things from him."

    Feels good, right? Sorry. The Democrats shouldn't mistake a sugar high for nutrition. They're still getting their butts kicked. Being Not Trump gained them only a net of six seats in the House in November's election, and will not be enough to win a majority in 2018.

    Reliance on identity politics and media-cushioned affirmation, and a blind spot to the genuine pain of the white working class, is precisely what produced a President Trump. For the next year, Democrats should filter their policy initiatives through the eyes of the person Trump claims to speak for - the forgotten American.

    Of course, Trump's phrase was lifted from somewhere else. Franklin Roosevelt first rode to victory in 1932 by urging fellow citizens to put faith in "the forgotten man at the bottom of the economic pyramid."

    Roosevelt actually did something for that overlooked American - Social Security, minimum wage, building roads, bridges and dams - and was rewarded with a majority coalition that carried the United States to new heights. Therein lies the way back to power for Democrats.

    When Democrats lost the South - for multiple generations, as it turned out - it put them in a deep hole, forcing them to rely on a surge of young and Latino voters to turn the demographic tide, or candidates with broad appeal beyond the party strongholds on the coasts.

    President Obama left office with soaring approval numbers and a great legacy. But Democrats also lost 1,034 state and federal offices in his time. Whites are still 70 percent of the vote. If Democrats continue to hemorrhage voters among the working class, they will never see the presidency, or even expect to govern in one house, for a long time.

    The way out is not that difficult. Yes, they should engage in hand-to-hand combat in the capital. And certainly, Democrats must turn to the courts when the rule of law is broken. But they have to be for something, as well - a master policy narrative, promoting things that help average Americans. The old Broadway adage was how it will play in Peoria. For Democrats, they should think of Joe Biden's Scranton, Pa., every time they take to a podium.

    Julio -> Peter K.... , February 11, 2017 at 03:22 PM
    "This man in the White House is incoherent, incompetent and dangerous. And we have to protect children and other living things from him."

    Yes, Ms. Pelosi. Unfortunately, we knew this before the election. Which you and your party lost.

    Chris G -> Julio ... , February 12, 2017 at 05:52 AM
    The follow-up to Pelosi's statement is "No [kidding]. What actions are you taking to protect said children and living things?"

    What's the plan for supporting Water Protectors and DAPL protesters? What's the plan for shutting down the Senate after McConnell and co exercise the nuclear option to force a vote on Gorsuch? What's the plan for preventing a vote on Gorsuch? How about CBP personnel who ignore court orders? Not an unreasonable expectation that some will - what to do about them? Expressions of outrage are easily ignored if there's no follow-up action. Perpetrators' lives need to be made difficult.

    Julio -> Chris G ... , February 12, 2017 at 09:35 AM
    Yep. No specifics. If I hear another vacuous statement about how they will "fight" for children, minorities etc. I will puke.

    [Feb 12, 2017] Brexit and maybe even Trump's victory say something about the arrogance of the neoliberal elite.

    Feb 12, 2017 | economistsview.typepad.com
    Ed Brown -> Jerry Brown... February 11, 2017 at 08:00 AM , 2017 at 08:00 AM
    Personally, I found the ProMarket link ( We Are Arrogant - We hold On to Our Old Beliefs on Trade"- ProMarket ) to be more interesting than the Noah Smith article ( Still Seeking Growth From Tax Cuts and Union Busting - Noah Smith ). At least the last few paragraphs of the ProMarket link were worth reading. I expected to see some good discussion on this part today:

    BY: Right. Brexit and maybe even Trump's victory say something about the arrogance of the elite.

    Bankers say that free trade should prevail. Even we, academics-how many of us are actually looking into distribution and redistribution? Few. We're still spending time on writing dynamic models to talk about the gains of trade.

    Even if old-fashioned free trade is correct, the speed of adjustment is very important. We know that rapid adjustment is no good. How many of us ask ourselves what should be the adjustment in trade? We rarely talk about that.

    The world may have changed. I gave you my conjecture. But we are also arrogant. We hold on to our old beliefs on the gains of trade.

    ----
    Very Dani Rodrick, I thought. Interesting stuff.

    Ed Brown -> Ed Brown... , February 11, 2017 at 08:12 AM
    Also, this is something that I think you'll like. I have not read all of it yet but here is the link and an excerpt: http://evonomics.com/time-new-economic-thinking-based-best-science-available-not-ideology/
    "Some will cling on to the idea that the consensus can be revived. They will say we just need to defend it more vigorously, the facts will eventually prevail, the populist wave is exaggerated, it's really just about immigration, Brexit will be a compromise, Clinton won more votes than Trump, and so on. But this is wishful thinking. Large swathes of the electorate have lost faith in the neoliberal consensus, the political parties that backed it, and the institutions that promoted it. This has created an ideological vacuum being filled by bad old ideas, most notably a revival of nationalism in the US and a number of European countries, as well as a revival of the hard socialist left in some countries."

    I think Peter K has been making similar points for a long time now. Interesting stuff.

    Chris Lowery -> Ed Brown... , February 11, 2017 at 09:02 AM
    Consensus among whom? The economic-political elite? Maybe; but certainly not among the general electorate. Most voters were voting for parties out of habit, or on cultural issues (for or against diversity and civil rights), or bread & butter economic issues ("the Republicans will cut my taxes and the regulation of my business" versus "the Democrats will preserve my Medicare and Social Security"). I don't think most voters had/have any clue of what neoliberalism is.
    Ed Brown -> Chris Lowery ... , February 11, 2017 at 09:58 AM
    Well, you raise an excellent point. I don't have a solid rejoinder but I will note that if even 5% of the electorate changes its mind an election result can flip one way or the other. But, yes, I agree with you that most voters are not selecting a candidate based on which candidate's economic philosophy is most closely aligned with theirs. Still, especially in the primaries, where the voters are a different population than the general, it could make a difference. I would argue that it was just this difference that made Sanders surprisingly popular among the Democratic primary voters.
    Chris Lowery -> Ed Brown... , February 11, 2017 at 10:22 AM

    Agreed.

    Sent from my iPad

    Peter K. -> Chris Lowery ... , February 11, 2017 at 10:14 AM
    doesn't explain the primaries where Trump beat Jeb and Cruz and where Sanders, a fringe candidate did so well.

    Most people don't bother to vote.

    Chris Lowery -> Peter K.... , February 11, 2017 at 10:43 AM
    The question is to what extent people were voting FOR a candidate, as AGAINST a candidate or the status quo. That's the only point I was trying to make.

    Most voters have neither the time, energy, inclination, or knowledge base to delve into the issues to make an informed decision on which candidate/platform most reflects their values and aspirations. They subcontract out that vetting of individual candidates to parties that they believe are broadly reflective of their views.

    This past general election, and its preceding primaries, was the result of a broad revolt against the candidates anointed by the parties' elites, indicating deep dissatisfaction with the status quo.

    Just my two cents...

    RC AKA Darryl, Ron -> Chris Lowery ... , February 11, 2017 at 01:48 PM
    Totally. And I still concur with those dissatisfied voters' sentiments, but not the veracity of their results.
    Peter K. -> Ed Brown... , February 11, 2017 at 09:23 AM
    "I think Peter K has been making similar points for a long time now. Interesting stuff."

    Yes I liked the as well.

    Luigi Zingales is a member of the editorial board for Pro Market and he had some piece published in the New York Times about economics and politics (specifically Italian I think).

    He was the first I read who compared Trump with Silvio Berlusconi. Zingales discussed how Berlusconi was brought down, by being treated as an ordinary conservative politician. Perhaps the same will work with Trump.

    Peter K. -> Peter K.... , February 11, 2017 at 09:23 AM
    "Yes I liked the link as well."
    Jerry Brown -> Ed Brown... , February 11, 2017 at 11:38 AM
    Yes, I had read the evonomics piece and thought it was good. Thanks. Eric Beinhocker makes some good points. I liked his optimism as far as some forms of populism were concerned, and had a slight hope that Donald Trump might turn into a Theodore Roosevelt type of populist. That hope has disappeared completely and now we face the realization that we are truly completely screwed.
    Peter K. -> Jerry Brown... , February 11, 2017 at 01:06 PM
    I didn't have any hope that Trump would be a good populist.
    Jerry Brown -> Peter K.... , February 11, 2017 at 01:14 PM
    Well I try to be an optimist but that has not worked out. You were correct of course.
    Choco Bell -> Ed Brown... , February 12, 2017 at 07:50 AM
    asymmetric information, and the recent illuminating example of Wells Fargo's excellence in pushing products that customers did not want nor need.

    BY: Some financial "innovation" is faddish. It does not create value.

    GR: Approximately 9 percent of U.S. GDP is finance. Some economists argue that probably 3-5 percent is useful for allocating capital, storing value, smoothing consumptions, and creating competition, and the rest is preying on asymmetric information
    "
    ~~Guy Roinik~

    Do you see how this asymmetric information plays out?

    It is the retail vendor who keeps better information than the retail customer. It is the vendor's expectations of disinflation vs inflation rather than the customer's expectations that control the change in M2V. Got it?

    When vendor expects deflation he dumps inventory, but when he expects inflation he holds on to inventory as he waits for higher profit margins to arrive. He holds onto merchandise by simply raising prices. But why do economists advertise the reverse mechanism? Why does the status quo have a need for distorting truth?

    Inflation is offered to the proles as a substitute for tax relief to the impoverished. Do you see how it works?

    "
    Tax relief for the wealthy will give you delicious inflation. Now jump for it!
    "
    ~~The Yea Sayers~

    Jump, Fools,
    Jump
    !

    Soul Super Bad -> Jerry Brown... , February 11, 2017 at 10:02 AM
    union busting, tax cutting, supply side type state policies don't result in better
    "

    unions will push a country into the "middle income trap". Is that the push we are now gettting from 45th President's administration?

    Time should soon
    tell
    !

    [Feb 12, 2017] NAFTA Has Harmed Mexico a Lot More than Any Wall Could Do

    Feb 12, 2017 | economistsview.typepad.com
    anne : February 11, 2017 at 06:58 AM , 2017 at 06:58 AM
    http://cepr.net/publications/op-eds-columns/nafta-has-harmed-mexico-a-lot-more-than-any-wall-could-do

    February 9, 2017

    NAFTA Has Harmed Mexico a Lot More than Any Wall Could Do
    By Mark Weisbrot

    President Trump is unlikely to fulfill his dream of forcing Mexico to pay for his proposed wall along the United States' southern border. If it is built, it would almost certainly be US taxpayers footing the bill, with some estimates as high as $50 billion. But it's worth taking a step back to look at the economics of US-Mexican relations, to see how immigration from Mexico even became an issue in US politics that someone like Trump could try to use to his advantage.

    NAFTA (the North American Free Trade Agreement) is a good starting point. While it has finally become more widely recognized that such misleadingly labelled "free trade" agreements have hurt millions of US workers, it is still common among both liberal and right-wing commentators to assume that NAFTA has been good for Mexico. This assumption is forcefully contradicted by the facts.

    If we look at the most basic measure of economic progress, the growth of GDP, or income, per person, Mexico ranks fifteenth out of 20 Latin American countries since it joined NAFTA in 1994. Other measures show an even sadder picture. According to Mexico's latest national statistics, the poverty rate in 2014 was 55.1 percent ― actually higher than the 52.4 rate in 1994.

    Wages tell a similar story: almost no growth in real (inflation-adjusted) wages since 1994 ― just about 4.1 percent over 21 years.

    Why did Mexico fare so poorly under NAFTA? We must understand that NAFTA was a continuation of policies that began in the 1980s, under pressure from Washington and the International Monetary Fund, when Mexico was particularly vulnerable during a debt crisis and world recession. These policies included the deregulation and liberalization of manufacturing, foreign investment and ownership (70 percent of Mexico's banking system is now foreign owned). Mexico also moved away from the pro-development policies of the previous decades toward a new, neoliberal prescription that tied Mexico ever more closely to its northern neighbor and its questionable ideas about economic development.

    The purpose of NAFTA was to lock in these changes and policies in an international treaty, so that they would be more difficult to reverse. It was also designed to add special privileges for transnational corporations, like the right to sue governments for regulations that reduced their potential profits ― even those dealing with public health or environmental safety. These lawsuits are decided by a tribunal of mostly corporate lawyers who are not bound by precedent or any national legal system.

    About two million net jobs were lost in Mexican agriculture, with millions more displaced, as imported subsidized corn wiped out small farmers. From 1994–2000, immigration to the US from Mexico increased by 79 percent, before dropping off in the 2000s.

    Now about that wall: if the Mexican economy had just continued to grow post-1980, as it did for the two decades prior, Mexicans would have an average income at European levels today. Extremely few Mexicans would take big risks to live or work in the US. But growth collapsed after 1980, under Washington's failed experiment. Even if we look just at the 23 years post-NAFTA ― the much better years ― GDP per person has grown by just 29 percent, a fraction of the 99 percent growth from 1960–1980.

    The wall would cause significant environmental as well as economic damage, if it is ever built. But it is the long-term damage that Washington has helped visit upon the Mexican economy that has brought us to the point where a US president could even propose such a monstrosity.

    anne -> anne... , February 11, 2017 at 07:34 AM
    What is startling to me and little understood is that between 1992 and 2015 real per capita growth in Mexico was slower than in every country in South America other than Venezuela, slower than every country in Central America, slower than Canada or the United States in North America, slower than every country in the Caribbean other than Jamaica for which there is growth data.

    Total factor productivity in Mexico actually declined after 1992 through 2014, with the productivity experience being poorer than in every country in South America other than Venezuela, poorer than in the 4 of 6 countries in Central America for which productivity is recorded, poorer than in Canada or the United States in North America, poorer than in every country in the Caribbean for which there is productivity data.

    Remarkably when I looked at the growth and productivity experience of Mexico from 1992 on, relative to Spanish or Portuguese language countries apart from this hemisphere, the experience of Mexico was poorest of all. That means Spain, Portugal, the Philippines and Angola for growth, and Spain, Portugal and the Philippines for productivity.

    Observer -> anne... , February 11, 2017 at 08:05 AM
    Well, "monstrosity" might be a little strong, given its history of bi-partisan support.

    "WASHINGTON - As a senator, Barack Obama once offered measured praise for the border control legislation that would become the basis for one of Donald Trump's first acts as president.

    "The bill before us will certainly do some good," Obama said on the Senate floor in October 2006. He praised the legislation, saying it would provide "better fences and better security along our borders" and would "help stem some of the tide of illegal immigration in this country."

    Obama was talking about the Secure Fence Act of 2006, legislation authorizing a barrier along the southern border passed into law with the support of 26 Democratic senators including party leaders like Hillary Clinton, Joe Biden, and Chuck Schumer."

    In the House of Representatives, the Fence Act passed 283–138, and in the Senate 80–19. The bill was signed into law in October 2006.

    https://www.bostonglobe.com/news/politics/2017/01/26/when-wall-was-fence-and-democrats-embraced/QE7ieCBXjXVxO63pLMTe9O/story.html

    anne : , February 11, 2017 at 07:05 AM
    http://cepr.net/images/stories/reports/ecuador-2017-02.pdf

    February, 2017

    Decade of Reform: Ecuador's Macroeconomic Policies, Institutional Changes, and Results
    By Mark Weisbrot, Jake Johnston, and Lara Merling

    Executive Summary

    This paper looks at some of the institutional, policy, and regulatory changes enacted by the government of Ecuador, as well as overall economic and social indicators, over the decade since the Rafael Correa government took office.

    Among the highlights:

    Indicators

    Annual per capita GDP growth during the past decade (2006–2016) was 1.5 percent, as compared to 0.6 percent over the prior 26 years. This is a significant improvement, despite the fact that the economy was hit by major external economic shocks.

    The poverty rate declined by 38 percent, and extreme poverty by 47 percent. Much of the decline in poverty was a result of economic growth and employment, but some was also a result of government programs that helped poor people, such as the cash transfer program Bono de Desarollo Humano, which more than doubled in size as a percent of GDP.

    The reduction in poverty was many times larger than that of the previous decade.

    Inequality also fell substantially, as measured by the Gini coefficient (from 0.55 to 0.47), or by the ratio of the top 10 percent to the bottom 10 percent of the income distribution (from 36 to 25, as of 2012).

    The government doubled social spending, as a percentage of GDP, from 4.3 percent in 2006 to 8.6 percent in 2016. This included large increases in spending on education, health, and urban development and housing.

    There were significant gains in enrollment at various levels of education. Spending on higher education increased from 0.7 to 2.1 percent of GDP; this is the highest level of government spending on higher education in Latin America, and higher than the average of the Organisation for Economic Co-operation and Development countries.

    Government expenditure on health services doubled as a percentage of GDP from 2006 to 2016.

    Public investment increased from 4 percent of GDP in 2006 to 14.8 percent in 2013, before falling to about 10 percent of GDP in 2016.

    Policy Changes and Reforms

    The 2008 constitution reverses the mandate of the 1998 constitution that had made the Central Bank formally independent of the government, with its most important responsibility to ensure price stability. The Central Bank became part of the economic team of the executive branch.

    The government defaulted on $3.2 billion, about one-third of its foreign debt, in December 2008 after an international commission found that it was illegally or illegitimately contracted.

    A domestic liquidity requirement for banks was established. This mandates that all banks hold 45 percent of their liquid assets domestically. This was increased to 60 percent in August 2012, and the actual amount of these reserves held domestically increased to more than 80 percent by 2015.

    A tax on capital leaving the country raised about $1 billion annually in government revenue from 2012 to 2015.

    Government revenue increased from 27 percent of GDP in 2007 to a peak of 44 percent in 2012, before falling to 30 percent in 2016.

    A fiscal stimulus of 5 percent of GDP was enacted in 2009, to help minimize damage from the world recession, and a collapse in oil prices and remittances.

    The "solidarity-based" part of the financial sector ― cooperatives, credit unions, savings and loan associations, and other member-based organizations - expanded from 8.3 percent of total credit in 2008 to 13.6 percent in 2016.

    From 2011 to 2016, $6.8 billion of quantitative easing (QE) was used to ease a credit crunch, government spending, and loans from state-owned banks.

    Central bank credit to the government (as a part of QE) increased to 2.4 percent of GDP in 2016, as part of an effort to combat recession.

    The primary budget deficit increased from $3.4 billion to $4.3 billion, from 2013 to 2014. It then decreased to $3.7 billion in 2015, before rising to $6.1 billion (about 6 percent of GDP) in 2016.

    In March 2015, the government adopted a temporary balance of payments safeguard, under World Trade Organization rules, in response to the collapse of oil prices and the appreciation of the US dollar. This move enabled Ecuador to impose tariffs on a range of imports.

    A reduction of imports as a result of tariffs adopted under the balance of payments safeguard provided a stimulus of about 7.6 percent of GDP, thus counteracting spending cuts.

    anne -> anne... , February 11, 2017 at 07:31 AM
    https://research.stlouisfed.org/fred2/graph/?g=29Od

    August 4, 2014

    Real per capita Gross Domestic Product for Mexico, Ecuador and Bolivia, 2000-2014

    (Percent change)


    https://research.stlouisfed.org/fred2/graph/?g=29Og

    August 4, 2014

    Real per capita Gross Domestic Product for Mexico, Ecuador and Bolivia, 2000-2014

    (Indexed to 2000)

    anne -> anne... , February 11, 2017 at 07:32 AM
    https://research.stlouisfed.org/fred2/graph/?g=29Of

    November 1, 2014

    Total Factor Productivity at Constant National Prices for Mexico, Ecuador and Bolivia, 2000-2011


    https://research.stlouisfed.org/fred2/graph/?g=29Oi

    November 1, 2014

    Total Factor Productivity at Constant National Prices for Mexico, Ecuador and Bolivia, 2000-2011

    (Indexed to 2000)

    [Feb 12, 2017] The state of our infrastructure: Roads and bridges

    Feb 12, 2017 | economistsview.typepad.com
    Fred C. Dobbs -> Tom aka Rusty... February 11, 2017 at 08:05 AM , 2017 at 08:05 AM
    It has been observed that the
    US needs a LOT of bridge work.

    The state of our infrastructure: Roads and bridges http://sponsored.bostonglobe.com/rocklandtrust/the-state-of-our-infrastructure-roads-and-bridges/
    Boston Globe - January 31

    ... A 2015 survey by the U.S. Dept. of Transportation found there are more than 450 structurally deficient bridges in the state, although the number is down from previous years. Every working day, nearly 10 million cars, trucks, and school buses cross these deteriorating overpasses. And then there's the nation's rail system and airports, which lag far behind other nations in speed, efficiency, and modernization. ...

    (And that's just in Massachusetts.)

    Soul Super Bad -> Fred C. Dobbs... , February 11, 2017 at 11:02 AM
    US needs a LOT of bridge work.
    "

    Bridgework and a partial plate! Should we shift gears on our interstate construction?

    By building our long haul interstates as one-way roads interleaved with roads going in other direction, we could have twice as many roads but intersections could be much simpler, efficient, and less confusing. Freeflow overpass/underpass with turning ramps will save fuel thus environment. Sure!

    We waste lot of traffic control man hours and squad cars that could be otherwise deployed towards solving crime and crushing the mob. By proper design and construction of speed bumps some of this highway patrol could be eliminated. Ceu!

    Rather that short 2 foot bumps in the road, build smooth slow and long valley and knoll that will not rattle your frame and bill you for steering realignment but instead send an 18 wheeler up into the air for a half gainer. This kind of speed trap could eliminate lot of bad

    chromosomes from the
    gene-pool
    !

    [Feb 12, 2017] Trump is more reality based than free trade enthusiast and corporate shills who helped destroy the US by cheering on free trade and de-industrialization.

    Feb 12, 2017 | economistsview.typepad.com
    , February 10, 2017 at 08:35 PM
    The US neoliberal society is facing a lot of serious problems, in many different domains, energy, financial, political, moral. Looks like we live in the society the is either close or is entering the stage of the "perma crises" not just "secular stagnation" as before in "golden years" of Bush II and Obama.

    But our problem is not called Donald Trump. It is much deeper. He is just a symptom, an apt manifestation of our problems, if you wish.

    That's what Professor Krugman and his neoliberal friends in NYT are missing in their jeremiad against him.

    Trump at least noticed 70,000 factories were lost; robots ate homework story total nonsense : , February 10, 2017 at 09:37 PM
    Trump is more reality based than free trade enthusiast and corporate shills who helped destroy the US by cheering on free trade de-industrialization.

    Krugman et al. not aware Africa is devoid of industry while East Asia is PACKED with manufacturing and where 90% of robots are produced and used.

    Trump is about the only sentient policymaker left in America. GOD BLESS HIM AND HIS NOBLE WORK TO RESTORE THE NATION ECONOMISTS WORKED SO HARD TO DESTROY

    libezkova -> Trump at least noticed 70,000 factories were lost; robots ate homework story total nonsense... , February 11, 2017 at 05:04 AM
    What has happened to "hope and change" is very straightforward: it buried Democratic Party with its lies and militarism and there is no way back.

    That's why Trump. Obama said all the right things and did the opposite. He has gutted the country and obliterated the middle class while continuing fighting wars of neoliberal expansion and conquest.

    Dismissing Trump and Trump's voters as "deplorables" gives Democrats like Krugman an excuse to avoid any self examination about how the neoliberal policies they advocated failed the majority of population of the country and have alienated electorate.

    The last two democrat presidents destroyed as much of the New Deal as their Republican counterparts and couldn't wait to gut the remnants such as SS. That's undeniable.

    As a result the key tenets of neoliberal ideology are now as dead as the key postulated of Bolshevism were in 1945. The rule of financial oligarchy disguised as "Liberal democracy", globalization and free trade, free markets as a substitute for government, deregulation, de-industrialization, letting market forces determine the characteristics of employment, etc.

    Does anybody here believes this sh*t? I doubt it. Even those who advocate it, have doubts.

    Still as a result of 36 years of brainwashing large swathes of US society accept without questioning the core tenets of neoliberalism much like Soviet population assepted the key postulated on Bolshevism. They believe that "the market" trumps all other forms of organization of activities of the society, that everything works better that way, that markets are virtuous. As a result, they believe in the false notion that the government is always and ever getting in the way of markets and therefore needs to be made as small and weak as possible.

    If you read Michael Mann's, The Sources of Social Power you will notice that he places Ideological Power first in his four component model of social power: ideological, economic, military, and political.

    Each of them create different but complementary sources of power within a given society:

    -- Ideological Power derives from the human need to find ultimate meaning in life, to share norms and values, and to participate in aesthetic and ritual practices with others.

    -- Economic Power derives from the human need to extract, transform, distribute, and consume the products of nature. Economic relations are powerful because they combine the intensive mobilization of labor with use of capital, trade, and production chains

    -- Military Power is based on refined, concentrated and lethal violence.

    -- Political Power is the centralized and territorial regulation of social life. The basic function of government is the provision of order using this type of power.

    The main tenets of neoliberalism are still very powerfully embedded in people minds. But ideology is dead and that spells troubles the same way as death of Bolshevism spelled troubles for the USSR.

    See also series of Mark Blyth interviews such as
    https://www.youtube.com/watch?v=a0q_Ww1q1j8

    cm -> libezkova... , February 11, 2017 at 06:30 PM
    If by bolshevism you mean Soviet communism (the party ideology), I don't know why you say it was dead in 1945. The SU had just won a major war (OK, not entirely on its own), and social development undoubtedly trended up until at least the 70's. Likewise in most other "communist" nations. It was the transition from a largely agrarian society to one based predominantly on industry and technology (powered by fossil fuels, mostly), and much expanded motor vehicle based transportation, like in the West.
    cm -> cm... , February 11, 2017 at 06:37 PM
    And the SU along with all other "communist" nations stagnated and declined in the 80's, maybe late 70's. The reasons are manifold, but part was corruption and ineffectiveness of the decision making apparatus by elites insulating themselves from problems and feedback, and self-dealing (at least the top echelons of the elites provided themselves access to Western consumer goods). At the same time they clung on to an increasingly ineffective central planning regime that probably worked better in the early stages, but was overwhelmed by complexity it couldn't handle, aside from corruption. Heavy handed oppression by a pervasive security apparatus could not compensate for nor remove the underlying issues.
    libezkova -> cm... , February 12, 2017 at 09:14 AM
    That's all true.

    What you are missing is the "fish rots from the head". After 1945 or somewhat later the ideology was discredited. The idea that Bolshevism can produce faster economic and technological growth at this time was clearly seen by both the elite and "Russian Intelligentsia" ( https://en.wikipedia.org/wiki/Intelligentsia ) as false. And that fact was intuitively felt as "something went wrong" by Soviet white-collar and blue collar workers.

    The same happens with neoliberalism in 2008. Suddenly people see that the king is naked. That redistribution of wealth up via "market mechanisms" does not bring prosperity for everybody, just to the top 10 or 20% of population. And top 1% becomes filthy rich at the expense of everybody else. That's the net result.

    Like in the USSR brainwashing is so strong that this zombie stage will last decades, but I do think neoliberalism is doomed for the same reason that Bolshevism was doomed if not in 1945, then in 70th. It failed to deliver on its promises.

    And if in the past people like Krugman were viewed as gurus and their math perversions were considered as some hidden revelation of truth about the economics of modern society, now they are viewed as corrupt academic stooges of financial oligarchy they always were.

    And their math exercises as another smoke screen of charlatans who are pretending to be scientists. Modern snake oil salesmen if you wish.

    Krugman now can print his math equations (especially differential equations, of which he was so proud of ;-) shred them and eat them with borsch to demonstrate some repentance...

    If you said nothing as the US deindustrialized and became a third world country, please be quiet now : , February 11, 2017 at 11:26 PM
    Economists who cheered on de-industrialization and the destruction of the US industrial base really don't have the moral right to say much at this point.

    You did nothing while the country burned to the ground and now half of the US is a ghetto, and the other half is not a ghetto only because of credit cards and exploding debt levels.

    Pres. Trump should invite free trade economists on a tour of the destroyed cities: Gary, Camden, E. St. Louis etc.

    [Feb 12, 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

    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.

    [Feb 12, 2017] Dean Baker on fakeness of neoliberal concept of labour market and NYT presstitutes which promote it

    Feb 12, 2017 | economistsview.typepad.com
    anne : February 11, 2017 at 06:45 AM , 2017 at 06:45 AM
    http://cepr.net/blogs/beat-the-press/justin-wolfers-is-mistaken-restrictions-on-firing-don-t-have-to-reduce-employment

    February 10, 2017

    Justin Wolfers Is Mistaken, Restrictions on Firing Don't Have to Reduce Employment

    Donald Trump has used his podium on several occasions to harangue companies about moving jobs overseas. This is probably not an effective way to conduct economic policy, but Justin Wolfers misled * New York Times readers in claiming:

    "Research shows that efforts to boost employment by making it difficult or costly to fire workers have backfired. The prospect of a costly and lengthy legal battle for laid-off employees makes it less appealing to hire new workers. The result has been that higher firing costs have led to to weaker productivity, sclerotic labor markets and higher unemployment."

    Actually, more recent research results, ** including more recent work *** from the Organisation for Economic Co-operation and Development (the source to which he links), show that there is no necessary link between restrictions on firing and unemployment. While excessive restrictions on firing can undoubtedly hurt employment and growth, there is no reason to assume that moderate amounts of severance pay, or other disincentives to dismiss workers, will discourage investment and hiring.

    A requirement to give longer term workers severance pay when dismissed does change the incentives facing an employer. In this situation they have more incentive to retrain workers to ensure that they are as productive as possible. They may also opt to invest more in existing facilities rather than move overseas in order to avoid severance pay.

    * https://www.nytimes.com/2017/02/09/upshot/trumps-defense-of-ivanka-reflects-approach-that-could-hurt-the-economy.html

    ** http://cepr.net/documents/publications/cepa200404.pdf

    *** http://www.oecd.org/els/emp/38569387.pdf

    -- Dean Baker

    cm -> anne... , February 11, 2017 at 11:55 AM
    The primary reason preventing hiring is lack of demand or sales prospects for additional product/services the company produces. A company that can pressure its existing workers to work more, without much risk of resistance or departure, will usually do that. Of course that works only up to a point due to negative impact on work quality etc. When there is convincing additional demand promising sufficient margin, they *will* hire. I have yet to see a company that will forgo profitable business to restrict its size (exception - small founder-owned/controlled businesses where the owner doesn't want the business to grow to the point where they can no longer themselves manage it, and have to accept outside "meddling" in business decisions, i.e. it's no longer their business; also known as "lifestyle business").

    In the latter case the reason may also be that outside funding is needed to acquire new capacity (e.g. buy or build a new location), with the risk and imposition of external control that brings. But none of those are problems hiring workers.

    cm -> anne... , February 11, 2017 at 12:01 PM
    One thing that employers will frequently do, if they can, is bring in contingent workers on time-limited contracts that are extended one period at the time, for any position where this is possible (low cost to bring somebody up to speed, no dependency on and risk of loos of institutional memory).

    State or national labor departments will often at some point react to "abuse" (e.g. perma-temps) by imposing limits on contract extensions. Then the next gambit is herding temp workers through staffing agencies, and telling them to change employer every so often to avoid the extension limit. And they will do it because they have no better options.

    And that's where it always ends up - too few better options for workers.

    anne -> cm... , February 11, 2017 at 12:12 PM
    Really nicely explained.
    cm -> anne... , February 11, 2017 at 12:32 PM
    Thanks. Of course what would be convenient for employers is to be able to just let go of people who they have to hire as "perm" and retain for a while because of high costs of acquiring in-house experience and institutional knowledge effects. But every product/technology becomes obsolete eventually, the related experience diminishes in value, or at least the volume of demand for it, and after a number of years/decades, well, the workers are also exactly that many years older.

    [Feb 12, 2017] Still Seeking Growth From Tax Cuts and Union Busting

    Feb 12, 2017 | economistsview.typepad.com
    Denis Drew : February 11, 2017 at 08:29 AM , 2017 at 08:29 AM
    Re: Still Seeking Growth From Tax Cuts and Union Busting - Noah Smith


    States should feel perfectly free to rebuild labor union density -- one state at a time -- making union busting a felony. Republicans will have no place to hide.

    Suppose the 1935 Congress passed the NLRA(a) intending to leave any criminal sanctions for obstructing union organizing to the states. Might have been because NLRB(b) conducted union elections take place local by local (not nationwide) and Congress could have opined states would deal more efficiently with home conditions -- or whatever. What extra words might Congress have needed to add to today's actual bill? Actually, today's identical NLRA wording would have sufficed perfectly.

    Suppose, again, that under the RLA (Railroad Labor Act -- covers railroads and airlines, FedEx) -- wherein elections are conducted nationally -- that Congress desired to forbid states criminalizing the firing of organizers -- how could Congress have worded such a preemption (assuming it was constitutionally valid)? Shouldn't matter to us. Congress did not! :-O

    NYT's Nate Cohn reports Trump won by trading places with Obama as blue collar hero v Wall Street -- trade (unions) back. Republicans will have no place to hide.

    or more musings on what and how else to rebuild union density locally: http://ontodayspage.blogspot.com/2016/12/wet-backs-and-narrow-backs-irish.html

    [Feb 12, 2017] An Alleged Muslim Spy Ring - Is This Why Rex Tillerson Cleaned House Zero Hedge

    Feb 12, 2017 | www.zerohedge.com

    kavlar , Feb 11, 2017 10:27 PM

    What about this SPY RING?

    "I want Netanyahu to begin telling the truth, what the involvement of Israel was in 9/11. Over 134 Mossad operatives were picked up on 9/11. The FBI picked them up [and] debriefed them." - Dr. Steve Pieczenik, Former Deputy Assistant Secretary of State.

    nmewn -> Arnold , Feb 12, 2017 6:00 AM

    As I understand it, these "IT experts" also worked on Debbie Wassername-Schultz's computers.

    Oh no nmewn, what the hell can you possibly be thinking?! Clearly, beyond any shadow of a doubt...

    The Russians did it! ;-)

    nmewn -> Arnold , Feb 12, 2017 7:00 AM

    They are definitely trying to quash this one as it goes against most (if not all) false narratives they've created for public consumption.

    False Narrative: Hillary was the more competent candidate! - No, she purposely setup & ran an unsecured personal network and used it for government business.

    False Narrative: The Russians hacked the DNC! - No, according to the dims own sources a phishing email was clicked on that could have been sent by anyone.

    ... ... ...

    WeekendAtBernankes -> ThanksChump , Feb 12, 2017 10:42 AM

    Oldest brother had two years of experience getting paid 157k/yr. Median salary for IT Admin in Congress: 50k. He was highest paid person of all his (Democrat) Rep's staffers, including her Chief of Staff. The question is how and why? Were they all employed as a political favor in return for a large donation from anyone in particular? This should be investigated further.

    http://congressional-staff.insidegov.com/l/43573/Jamal-M-Awan

    [Feb 12, 2017] Russia Will Not Sell Snowden To Trump; Heres Why Zero Hedge

    Feb 12, 2017 | www.zerohedge.com

    Submitted by Alexander Mercouris via TheDuran.com,

    On Friday 10th February 2017 NBC circulated a report the Russian government in order to improve relations with the Trump administration was preparing to hand Edward Snowden over to the US.

    The report obviously worried Snowden himself, who tweeted that the report proved that he was not and never had been a Russian agent . That suggests that he took the report seriously.

    Snowden should not be worried, since the report is groundless and is clearly a provocation. To see why it is only necessary to look at the NBC report itself , which makes it clear who is behind it...

    U.S. intelligence has collected information that Russia is considering turning over Edward Snowden as a "gift" to President Donald Trump - who has called the NSA leaker a "spy" and a "traitor" who deserves to be executed.

    That's according to a senior U.S. official who has analyzed a series of highly sensitive intelligence reports detailing Russian deliberations and who says a Snowden handover is one of various ploys to "curry favor" with Trump. A second source in the intelligence community confirms the intelligence about the Russian conversations and notes it has been gathered since the inauguration.

    (bold italics added)

    It turns out that the story does not originate in Russia. It originates with our old friends the 'anonymous officials' of the US intelligence community.

    One of these officials claims that the story is based on "intelligence" of "Russian conversations" that the US intelligence community has 'gathered since the inauguration". We have no way of knowing at what level these "conversations" took place, assuming they took place at all, but it is inconceivable that the US intelligence community is genuinely informed of discussions within the top level of the Russian leadership – where such a question would be discussed – or if it is that it would publicise the fact by blurting the fact out to NBC.

    The reality is that there is no possibility of the Russians handing Snowden over to the US in order to please Donald Trump . Not only would doing so almost certainly breach Russian law – as Snowden's lawyer, who has denied the whole story , has pointed out – but it contradicts what I personally heard Russian President Putin say at the St. Petersburg International Economic Forum in 2014 when the subject of Snowden was brought up, which is that Russia never hands over people like Snowden once they have gained asylum in Russia. That is indeed Russian practice extending far back into the Soviet period, and I can think of no exceptions to it.

    As it happens Russian Foreign Ministry spokesman Maria Zakharova has denied the story in a Facebook post which links it to the ongoing struggle between the Trump administration and the US intelligence community (about which see more below). Here is how RT translates her post

    Today, US intelligence agencies have stepped up their work, updating two stale stories, 'Russia can gift Snowden to Trump' and 'confirmation found on the details of the scandalous dossier on Trump allegedly collected by an ex-employee of British intelligence.' But it may seem so only to those who do not understand the essence of the game. None of these statements have been made by representatives of the special services, but is information coming from NBC and CNN, citing unnamed sources. The difference is obvious, but only to experts. Yet it is useful for scandalizing the public and maintaining a degree of [public outrage] .

    It is evident that the pressure on the new administration on the part of political opponents within the United States continues, bargaining is going on. And that's why the US foreign policy doctrine has not yet been formed

    It is just possible that US intelligence overheard some gossip in Moscow about the Kremlin handing Snowden over to Donald Trump in order to curry favour with him. The various reports the US intelligence community released during the Clinton leaks hacking scandal show that the US intelligence community is not actually very well informed about what goes on in Moscow or how the Russian government works. In light of that it would not be entirely surprising if someone overheard some gossip about Snowden in Moscow which the US intelligence community is over-interpreting.

    Far more likely however is that – as Maria Zakharova says – this is a deliberate provocation, spread by someone within the US intelligence community who either wants to signal to Moscow what Moscow 'needs to do' if it wants better relations with the US, or (more probably) as a signal to Donald Trump of the minimum the US intelligence community expects of him if he wants the US intelligence community's support in seeking better relations with Russia.

    This story is interesting not because of what it says about what the Russians are going to do to Snowden – which in reality is nothing. Rather it is interesting because it shows the degree to which Snowden continues to be an object of obsession for the US intelligence community.

    The reason for that is that the US intelligence community knows that Snowden is not a Russian spy.

    As Snowden has pointed out, if he really were a Russian spy no-one in Washington would be talking about the Russians handing him over. The Russians do not hand their spies over any more than the US does, and if Snowden really were a Russian spy no-one in Washington would talking about the Russians handing him over.

    However if Snowden had been a Russian spy his actions would in that case have been simply a Russian intelligence operation of which the US intelligence community was the victim, of which there have been many since the Second World War. Espionage is what the US and Russia routinely do to each other, and there would be nothing remarkable about Snowden in that case.

    It is the fact that Snowden is on the contrary a deeply patriotic American who acted from patriotic motives that has the US intelligence community enraged and alarmed. From their point of view having a patriotic American publicly expose their practices Jason Bourne style is a far greater threat than have a Russian spy penetrate their systems, since because of the far greater publicity it is far more likely to damage them politically.

    This explains the extraordinary feud the US intelligence community has waged against Snowden, which in part explains why it has become so hostile to Russia, the country which has become his protector.

    Mr.Sono -> knukles •Feb 12, 2017 5:41 PM
    Putin is a man of his words and not a little bitch like Obama. I was suprised that fake news was all over zerohedge regarding this topic, but at the end zerohedge confirmed the fake news.
    Giant Meteor -> FreeShitter •Feb 12, 2017 5:35 PM
    One of the smartest plays the deep state could make is allowing him back, make small fuss, and issue a pardon. It would go far in deflating, diffusing the situation, de minimis so to speak. But, I suppose it is more about absolute control, control of the narrative, full spectrum dominance, cautionary tales etc. Pride goeth before the fall (destruction) I believe. Eventually this laundry is going to get sorted and cleaned, one way or the other.
    boattrash •Feb 12, 2017 5:13 PM
    " as Maria Zakharova says – this is a deliberate provocation, spread by someone within the US intelligence community who either wants to signal to Moscow what Moscow 'needs to do' if it wants better relations with the US, or (more probably) as a signal to Donald Trump of the minimum the US intelligence community expects of him if he wants the US intelligence community's support in seeking better relations with Russia."

    A full pardon from Trump would improve his standing with the American people, IMHO, on both the left and the right.

    HumanMan -> boattrash •Feb 12, 2017 5:29 PM
    This was my thought when the story broke. Putin can no longer claim to be a protector of human rights if he hands over Snowden...Unless Trump is going to pardon him. As you pointed you, that would be great (politically) for Trump too. Done this way would be a win win for the two and another win for We The People. On top of that, Putin doesn't want to babysit Snowden. I'm sure the Russians would be happy to have a politically expediant way to get the American spy out of their country.
    HRClinton •Feb 12, 2017 5:16 PM
    The Deep State rules, no matter what DJT thinks.

    The roots go deep in my fomer DOS and in the CIA. Even in the DOD and Senate. Bill and I know this better than anyone.

    FAKE NEWS:

    On Friday 10th February 2017 NBC circulated a report the Russian government in order to improve relations with the Trump administration was preparing to hand Edward Snowden over to the US.

    How many gringos were fooled???--- not many

    shovelhead •Feb 12, 2017 5:37 PM
    Pissgate II...

    Brought to you from your friends at the CIA.

    Mr. Crisp •Feb 12, 2017 5:50 PM
    Snowden showed the world that the NSA wasn't just tracking terrorists, they were tracking pretty much everyone, everywhere. He deserves a full pardon.

    [Feb 11, 2017] The Paradox of Financialized Industrialization

    Notable quotes:
    "... More than any other economist of his century, Marx tied together the three major kinds of crisis that were occurring. His Theories of Surplus Value explained the two main forms of crises his classical predecessors had pointed to, and which the bourgeois revolutions of 1848 were fought over. These crises were the result of survivals from Europe's feudal epoch of landed aristocracy and banking fortunes. ..."
    "... Financially, Marx pointed to the tendency of debts to grow exponentially, independently of the economy's ability to pay, and indeed faster than the economy itself. The rise in debt and accrual of interest was autonomous from the industrial capital and wage labor dynamics on which Volume I of Capital focused. Debts are self-expanding by purely mathematical rules – the "magic of compound interest." ..."
    "... Industrial companies profit from labor not only by employing it, but by lending to customers. General Motors made most of its profits for many years by its credit arm, GMAC (General Motors Acceptance Corp.), as did General Electric through its financial arm. Profits made by Macy's and other retailers on their credit card lending sometimes accounted for their entire earnings. ..."
    "... This privatization of rents and their transformation into a flow of interest payments (shifting the tax burden onto wage income and corporate profits) represents a failure of industrial capitalism to free society from the legacies of feudalism. ..."
    "... Marx expected economies to act in their long-term interest to increase the means of production and avoid unproductive rentier income, underconsumption and debt deflation. Believing that every mode of production was shaped by the technological, political and social needs of economies to advance, he expected banking and finance to become subordinate to these dynamics. ..."
    "... It seemed that the banking system's role as allocator of credit would pave the way for a socialist organization of economies. Marx endorsed free trade on the ground that industrial capitalism would transform and modernize the world's backward countries. Instead, it has brought Western rentier finance and privatization of the land and natural resources, and even brought the right to use these country's currencies and financial systems as casinos. And in the advanced creditor nations, failure of the U.S. and European economies to recover from their 2008 financial crisis stems from leaving in place the reckless "junk mortgage" debts, whose carrying charges are absorbing income. Banks were saved instead of industrial economies, whose debts were left in place. ..."
    "... No observer of Marx's epoch was so pessimistic as to expect finance capital to overpower industrial capitalism, engulfing economies as the world is seeing today. Discussing the 1857 financial crisis, Marx showed how unthinkable anything like the 2008-09 Bush-Obama bailout of financial speculators seemed to be in his day. "The entire artificial system of forced expansion of the reproduction process cannot, of course, be remedied by having some bank, like the Bank of England, give to all the swindlers the deficient capital by means of its paper and having it buy up all the depreciated commodities at their old nominal values." [6] ..."
    "... Marx wrote this reductio ad absurdum not dreaming that it would become the Federal Reserve's policy in autumn 2008. The U.S. Treasury paid off all of A.I.G.'s gambles and other counterparty "casino capitalist" losses at taxpayer expense, followed by the Federal Reserve buying junk mortgage packages at par. ..."
    "... The failure to socialize banking (or even to complete its industrialization) has become the most glaring economic tragedy of Western industrial capitalism. It became the tragedy of post-Soviet Russia after 1991, letting its natural resources and industrial economy be financialized while failing to tax land and natural resource rent. The commanding heights were sold to domestic oligarchs and Western investors buying on credit with their own banks or in association with Western banks. This bank credit was simply created on computer keyboards. Such credit creation should be a public utility, but it has broken free from public regulation in the West. That credit is now reaching out to China and the post-Soviet economies as a means of appropriating their resources. ..."
    "... Note: Marx described productive capital investment by the formula M–C–M´, signifying money (M) invested to produce commodities (C) that sell for yet more money (M´). But the growth of "usury capital" – government bond financing for war deficits, and consumer lending (mortgages, personal loans and credit card debt) – consist of the disembodied M–M´, making money simply from money in a sterile operation. ..."
    Jan 26, 2017 | newscontent.cctv.com
    RGC -> RGC... January 26, 2017 at 05:44 AM

    The Paradox of Financialized Industrialization
    By Michael Friday, October 16, 2015

    These remarks were made at the World Congress on Marxism, 2015, at the School of Marxism, Peking University, October 10, 2015. The presentation was part of a debate with Bertell Ollman (NYU). I was honored to be made a permanent Guest Professor at China's most prestigious university.

    When I lectured here at the Marxist School six years ago, someone asked me whether Marx was right or wrong. I didn't know how to answer this question at the time, because the answer is so complex. But at least today I can focus on his view of crises.

    More than any other economist of his century, Marx tied together the three major kinds of crisis that were occurring. His Theories of Surplus Value explained the two main forms of crises his classical predecessors had pointed to, and which the bourgeois revolutions of 1848 were fought over. These crises were the result of survivals from Europe's feudal epoch of landed aristocracy and banking fortunes.

    Financially, Marx pointed to the tendency of debts to grow exponentially, independently of the economy's ability to pay, and indeed faster than the economy itself. The rise in debt and accrual of interest was autonomous from the industrial capital and wage labor dynamics on which Volume I of Capital focused. Debts are self-expanding by purely mathematical rules – the "magic of compound interest."

    We can see in America and Europe how interest charges, stock buybacks, debt leveraging and other financial maneuverings eat into profits, deterring investment in plant and equipment by diverting revenue to economically empty financial operations. Marx called finance capital "imaginary" or "fictitious" to the extent that it does not stem from within the industrial economy, and because – in the end – its demands for payment cannot be met. Calling this financial accrual a "void form of capital." [1] It was fictitious because it consisted of bonds, mortgages, bank loans and other rentier claims on the means of production and the flow of wages, profit and tangible capital investment.

    The second factor leading to economic crisis was more long-term: Ricardian land rent. Landlords and monopolists levied an "ownership tax" on the economy by extracting rent as a result of privileges that (like interest) were independent of the mode of production. Land rent would rise as economies became larger and more prosperous. More and more of the economic surplus (profits and surplus value) would be diverted to owners of land, natural resources and monopolies. These forms of economic rent were the result of privileges that had no intrinsic value or cost of production. Ultimately, they would push up wage levels and leave no room for profit. Marx described this as Ricardo's Armageddon.

    These two contributing forces to crisis, Marx pointed out, were legacies of Europe's feudal origins: landlords conquering the land and appropriating natural resources and infrastructure; and banks, which remained largely usurious and predatory, making war loans to governments and exploiting consumers in petty usury. Rent and interest were in large part the products of wars. As such, they were external to the means of production and its direct cost (that is, the value of products).

    Most of all, of course, Marx pointed to the form of exploitation of wage labor by its employers. That did indeed stem from the capitalist production process. Bertell Ollman has just explained that dynamic so well that I need not repeat it here.

    Today's economic crisis in the West: financial and rent extraction, leading to debt deflation Bertell Ollman has described how Marx analyzed economic crisis stemming from the inability of wage labor to buy what it produces. That is the inner contradiction specific to industrial capitalism. As described in Volume I of Capital, employers seek to maximize profits by paying workers as little as possible. This leads to excessive exploitation of wage labor, causing underconsumption and a market glut.

    I will focus here on the extent to which today's financial crisis is largely independent of the industrial mode of production. As Marx noted in Volumes II and III of Capital and Theories of Surplus Value, banking and rent extraction are in many ways adverse to industrial capitalism.

    Our debate is over how to analyze the crisis the Western economies are in today. To me, it is first and foremost a financial crisis. The banking crisis and indebtedness stems mainly from real estate mortgage loans – and also from the kind of massive fraud that Marx found characteristic of the high finance of his day, especially in canal and railroad financing.

    So to answer the question that I was asked about whether Marx was right or wrong, Marx certainly provided the tools needed to analyze the crises that the industrial capitalist economies have been suffering for the past two hundred years.

    But history has not worked out the way Marx expected. He expected every class to act in its own class interest. That is the only way to reasonably project the future. The historical task and destiny of industrial capitalism, Marx wrote in the Communist Manifesto, was to free society from the "excrescences" of interest and rent (mainly land and natural resource rent, along with monopoly rent) that industrial capitalism had inherited from medieval and even ancient society. These useless rentier charges on production are faux frais, costs that slow the accumulation of industrial capital. They do not stem from the production process, but are a legacy of the feudal warlords who conquered England and other European realms to found hereditary landed aristocracies. Financial overhead in the form of usury-capital is, to Marx, a legacy of the banking families that built up fortunes by war lending and usury.

    Marx's concept of national income differs radically from today's National Income and Product Accounts (NIPA). Every Western economy measures "output" as Gross National Product (GNP). This accounting format includes the Finance, Insurance and Real Estate (FIRE) sector as part of the economy's output. It does this because it treats rent and interest as "earnings," on the same plane as wages and industrial profits – as if privatized finance, insurance and real estate are part of the production process. Marx treated them as external to it. Their income was not "earned," but was "unearned." This concept was shared by the Physiocrats, Adam Smith, John Stuart Mill and other major classical economists. Marx was simply pressing classical economics to its logical conclusion.

    The interest of the rising class of industrial capitalists was to free economies from this legacy of feudalism, from the unnecessary faux frais of production – prices in excess of real cost-value. The destiny of industrial capitalism, Marx believed, was to rationalize economies by getting rid of the idle landlord and banking class – by socializing land, nationalizing natural resources and basic infrastructure, and industrializing the banking system – to fund industrial expansion instead of unproductive usury.

    If capitalism had achieved this destiny, it would have been left primarily with the crisis between industrial employers and workers discussed in Volume I of Capital: exploiting wage labor to a point where labor could not buy its products. But at the same time, industrial capitalism would be preparing the way for socialism, because industrialists needed to conquer the political stranglehold of the landed aristocracy and the financial power of banking. It needed to promote democratic political reform to overcome the vested interests in control of Parliaments and hence the tax system. Labor's organization and voting power would press its own self-interest and turn capitalism into socialism.

    China has indeed exemplified this path. But it has not occurred in the West.
    All three kinds of crisis that Marx described are occurring. But the West is now in a chronic depression – what has been called Debt Deflation. Instead of banking being industrialized as Marx expected, industry is being financialized. Instead of democracy freeing economies from land rent, natural resource rent and monopoly rent, the rentiers have fought back and taken control of Western governments, legal systems and tax policy. The result is that we are seeing a lapse back to the pre-capitalist problems that Marx described in Volumes II and III of Capital and Theories of Surplus Value.

    This is where the debate between Bertell Ollman and myself centers. My focus is on finance and rent overwhelming industrial capitalism to impose a depression stemming from debt deflation. This over-indebtedness is making the labor/capital problem worse, by weakening labor's political and economic position. To make matters worse, labor parties in the West no longer are fighting over economic issues, as they were prior to World War I.

    My differences with Ollman and Roemer: I focus on non-production costs
    Bertell follows Marx in focusing on the production sector: hiring labor to produce products, but trying to get as much markup as possible – while underselling rivals. This is Marx's great contribution to the analysis of capitalism and its mode of production – employing wage labor at a profit. I agree with this analysis.

    However, my focus is on the causes of today's crisis that are independent and autonomous from production: rentier claims for economic rent, for income without work – "empty" pricing without value. This focus on rent and interest is where I differ from that of Ollman, and also of course from that of Roemer. Any model of the crisis must tie together finance, real estate (and other rent-seeking) as well as industry and employment.

    The rising debt overhead can be traced mathematically, as can the symbiosis of the Finance, Insurance and Real Estate (FIRE) sector. But the interactions are too complex to be made into a single economic "model." I am especially worried that Roemer's model might be followed here in China, because it overlooks the most dangerous tendencies threatening China today: Western financial practice and its pro-rentier tax policy.

    China has spent the last half-century solving Marx's "Volume I" problem: the relations between labor and its employers, recycling the economic surplus into new means of production to provide more output, higher living standards, and most obviously, more infrastructure (roads, railways, airlines) and housing.

    But right now, it is experiencing financial problems from credit creation going into the stock market instead of into tangible capital formation and rising consumption standards. And of course, China has experienced a large real estate boom. Land prices are rising in China, much as they are in the West.

    What would Marx have said about this? I think that he would have warned China not to relapse into the pre-capitalist problems of finance funding real estate – turning the rising land rent into interest – and into permitting housing prices to rise without taxing them away.

    Soviet planning failed to take the rent-of-location into account when planning where to build housing and factories. But at least the Soviet era did not force labor or industry to pay interest or for rising housing prices. Government banks simply created credit where it was needed to expand the means of production, to build factories, machinery and equipment, homes and office buildings.

    What worries me about the political consequences of Roemer's model is that it focuses only on what Marx said about the production sector and employer-labor relations. It does not ask how "endowments" come into being – or how China has changed so radically in the past generation. It therefore neglects the danger of industrial capitalism lapsing back into a rent-and-interest economy. And by the same token, it underplays the threat to China and other socialist economies of adopting the West's surviving pre-feudal practices of predatory Bubble Finance (debt leveraging to raise prices) and wealth in the form of land-rent charges.

    These two dynamics – interest and rent – represent a privatization of banking and land that rightly are public utilities. Marx expected industrial capitalism to achieve this transition. Certainly socialist economies must achieve it!

    China has no need of foreign bank credit – except to cover the cost of imports and the foreign-exchange cost of investment in other countries. But China's foreign exchange reserves already are large enough to be basically independent of the U.S. dollar and euro. Meanwhile, the American and European economies are suffering from chronic debt deflation and depression that will reduce their ability to serve as markets – for their own producers as well as for China.

    Today's debt-wracked economies throw into question just what kind of crisis the capitalist countries are experiencing. Marx's analysis provides the tools to analyze its financial, banking and rent-extraction problems. However, most Marxists still view the 2008 financial and junk mortgage crash as resulting ultimately from industrial employers squeezing wage labor. Finance capital is viewed as a derivative of this exploitation, not as the autonomous dynamic Marx described.

    The costs of carrying the rising debt burden (interest, amortization and penalties) deflate the market for commodities by absorbing a growing wedge of disposable business and personal income. This leaves less to be spent on goods and services, causing gluts that lead to crises in which businesses scramble for money. Banks fail as bankruptcy spreads. By depleting markets, finance capital is antithetical to the expansion of profits and tangible physical capital investment.

    Despite this sterility, finance capital has achieved dominance over industrial capital. Transfers of property from debtors to creditors – even privatizations of public assets and enterprises – are inevitable as the growth of financial claims surpasses the ability of productive power and earnings to keep pace. Foreclosures follow in the wake of crashes, enabling finance to take over industrial companies and even governments.

    China has largely solved the "Volume I" problem – that of expanding its internal market for labor, investing the economic surplus in capital formation and rising living standards. It is confronted by Western economies that have failed to solve this problem, and also have failed to solve the "Volumes II and III" problem: finance and land rent. Yet few Western Marxists have applied his theories to the present downturn and its rentier problem. Following Marx, they view the task of solving this problem to be solved by industrial capitalism, starting with the bourgeois revolutions of 1848.

    Already in 1847, Marx's Poverty of Philosophy described the hatred that capitalists felt for landlords, whose hereditary rents siphoned off income to an idle class. Upon being sent copies of Henry George's Progress and Poverty a generation later, in 1881, he wrote to John Swinton that taxing land rent was "a last attempt to save the capitalist regime." He dismissed the book as falling under his 1847 critique of Proudhon: "We understand such economists as Mill, Cherbuliez, Hilditch and others demanding that rent should be handed over to the state to serve in place of taxes. That is a frank expression of the hatred the industrial capitalist bears towards the landed proprietor, who seems to him a useless thing, an excrescence upon the general body of bourgeois production." [2]

    As the program of industrial capital, the land tax movement stopped short of advocating labor's rights and living standards. Marx criticized Proudhon and other critics of landlords by saying that once you get rid of rent (and usurious interest by banks), you will still have the problem of industrialists exploiting wage labor and trying to minimize their wages, drying up the market for the goods they produce. This is to be the "final" economic problem to be solved – presumably long after industrial capitalism has solved the rent and interest problems.

    Industrial capitalism has failed to free economies from rentier interest and rent extraction
    In retrospect, Marx was too optimistic about the future of industrial capitalism. As noted above, he viewed its historical mission as being to free society from rent and usurious interest. Today's financial system has generated an overgrowth of credit, while high rents are pricing American labor out of world markets. Wages are stagnating, while the One Percent have monopolized the growth in wealth and income since 1980 – and are not investing in new means of production. So we still have the Volume II and III problems, not just a Volume I problem.

    We are dealing with multiple organ failure.

    Instead of funding new industrial capital formation, the stock and bond markets to transfer ownership of companies, real estate and infrastructure already in place. About 80 percent of bank credit is lent to buyers of real estate, inflating a mortgage bubble. Instead of taxing away the land's rising rental and site value that John Stuart Mill described as what landlords make "in their sleep," today's economies leave rental income "free" to be pledged to banks. The result is that banks now play the role that landlords did in Marx's day: obtaining for themselves the land's rising rental value. This reverses the central thrust of classical political economy by keeping such rent away from government, along with natural resource and monopoly rents.

    Industrial economies are being stifled by financial and other rentier dynamics. Rising mortgage debt, student loans, credit card debt, automobile debt and payday loans have made workers afraid to go on strike or even to protest working conditions. To the extent that wages do rise, they must be paid increasingly to creditors (and now to privatized health insurance and drug monopolies), not to buy the consumer goods they produce. Labor's debt dependency thus aggravates the "Volume I" problem of labor's inability to purchase the products it produces. To top matters, when workers seek to join the middle class "homeowner society" by purchasing their homes on mortgage instead of paying rent, the price entails locking themselves into debt serfdom.

    Industrial companies profit from labor not only by employing it, but by lending to customers. General Motors made most of its profits for many years by its credit arm, GMAC (General Motors Acceptance Corp.), as did General Electric through its financial arm. Profits made by Macy's and other retailers on their credit card lending sometimes accounted for their entire earnings.

    This privatization of rents and their transformation into a flow of interest payments (shifting the tax burden onto wage income and corporate profits) represents a failure of industrial capitalism to free society from the legacies of feudalism.

    Marx expected industrial capitalism to act in its own self-interest by industrializing banking, as Germany was doing along the lines that the French reformer Saint-Simon had urged. However, industrial capitalism has failed to break free of pre-industrial usurious banking practice. And in the sphere of tax policy, it has not shifted taxes away from land and natural resource rent. It has inverted the classical reformers' idea of "free markets" as being free from economic rent and predatory moneylending. The slogan now means economies free for the rentier class to extract interest and rent.

    Mode of production or mode of parasitism?

    Instead of serving industrial capitalism, today's financial sector is bleeding it to death. Instead of seeking profits by employing labor to produce goods at a markup, it doesn't even want to hire labor or engage in the process of production and develop new markets. The epitome of this postindustrial economics is Enron: its' managers wanted no capital at all – no employment, only traders at a desk (and crooked accountants).

    Today's characteristic mode of accumulating wealth is more by financial than industrial means: riding the wave of debt-financed asset-price inflation to reap "capital" gains. This seemed unlikely in Marx's era of the gold standard. Yet today, most academic Marxists still concentrate on his "Volume I" crisis, neglecting finance capitalism's failure to free economies from the rentier dynamics surviving from European feudalism and the colonial lands conquered by Europe.

    Marxists who went into Wall Street have learned their lessons from Volumes II and III. But academic Marxism has not focused on the FIRE sector – Finance, Insurance and Real Estate. It is as if interest and rent extraction are secondary problems to the dynamics of wage labor.

    The great question today is whether post-feudal rentier capitalism will stifle industrial capitalism instead of serving it. The aim of finance is not merely to exploit labor, but to conquer and appropriate industry, real estate and government. The result is a financial oligarchy, neither industrial capitalism nor a tendency to evolve into socialism.

    Marx's optimism that industrial capital would subordinate finance to serve its own needs

    Having provided a compendium of historical citations describing how parasitic "usury capital" multiplied at compound interest, Marx announced in an optimistic Darwinian tone that the destiny of industrial capitalism was to mobilize finance capital to fund its economic expansion, rendering usury an obsolete vestige of the "ancient" mode of production. It is as if "in the course of its evolution, industrial capital must therefore subjugate these forms and transform them into derived or special functions of itself." Finance capital would be subordinated to the dynamics of industrial capital rather than growing to dominate it. "Where capitalist production has developed all its manifold forms and has become the dominant mode of production," Marx concluded his draft notes for Theories of Surplus Value, "interest-bearing capital is dominated by industrial capital, and commercial capital becomes merely a form of industrial capital, derived from the circulation process." [3]

    Marx expected economies to act in their long-term interest to increase the means of production and avoid unproductive rentier income, underconsumption and debt deflation. Believing that every mode of production was shaped by the technological, political and social needs of economies to advance, he expected banking and finance to become subordinate to these dynamics. "There is no doubt," he wrote, "that the credit system will serve as a powerful lever during the transition from the capitalist mode of production to the production by means of associated labor; but only as one element in connection with other great organic revolutions of the mode of production itself." [4]

    The financial problem would take care of itself as industrial capitalism mobilized savings productively, subordinating finance capital to serve its needs. This already was happening in Germany and France.

    It seemed that the banking system's role as allocator of credit would pave the way for a socialist organization of economies. Marx endorsed free trade on the ground that industrial capitalism would transform and modernize the world's backward countries. Instead, it has brought Western rentier finance and privatization of the land and natural resources, and even brought the right to use these country's currencies and financial systems as casinos. And in the advanced creditor nations, failure of the U.S. and European economies to recover from their 2008 financial crisis stems from leaving in place the reckless "junk mortgage" debts, whose carrying charges are absorbing income. Banks were saved instead of industrial economies, whose debts were left in place.

    Irving Fisher coined the term debt deflation in 1933. He described it as occurring when debt service (interest and amortization) to pay banks and bondholders diverts income from being spent on consumer goods and new business investment. [5] Governments use their tax revenues to pay bondholders, cutting back public spending and infrastructure investment, education, health and other social welfare.

    No observer of Marx's epoch was so pessimistic as to expect finance capital to overpower industrial capitalism, engulfing economies as the world is seeing today. Discussing the 1857 financial crisis, Marx showed how unthinkable anything like the 2008-09 Bush-Obama bailout of financial speculators seemed to be in his day. "The entire artificial system of forced expansion of the reproduction process cannot, of course, be remedied by having some bank, like the Bank of England, give to all the swindlers the deficient capital by means of its paper and having it buy up all the depreciated commodities at their old nominal values." [6]

    Marx wrote this reductio ad absurdum not dreaming that it would become the Federal Reserve's policy in autumn 2008. The U.S. Treasury paid off all of A.I.G.'s gambles and other counterparty "casino capitalist" losses at taxpayer expense, followed by the Federal Reserve buying junk mortgage packages at par.

    Socialist policy regarding financial and tax reform

    Marx described the historical destiny of industrial capitalism as being to free economies from unproductive and predatory finance – from speculation, fraud and a diversion of income to pay interest without funding new means of production. On this logic, it should be the destiny of socialist economies to treat bank credit creation as a public function, to be used for public purposes – to increase prosperity and the means of production to give populations a better life. Socialist nations have freed their economies from the internal contradictions of industrial capitalism that stifle wage labor.

    China has solved the "Volume I" problem. But it still must deal with the West's unsolved "Volume II and III" problem of privatized finance, land rent and natural resource rent. Western economies seek to extend these neoliberal practices to use finance as a lever to pry away the economic surplus, to finance the transfer of property at interest, and to turn profits, rent, wages and other income into interest.

    The failure to socialize banking (or even to complete its industrialization) has become the most glaring economic tragedy of Western industrial capitalism. It became the tragedy of post-Soviet Russia after 1991, letting its natural resources and industrial economy be financialized while failing to tax land and natural resource rent. The commanding heights were sold to domestic oligarchs and Western investors buying on credit with their own banks or in association with Western banks. This bank credit was simply created on computer keyboards. Such credit creation should be a public utility, but it has broken free from public regulation in the West. That credit is now reaching out to China and the post-Soviet economies as a means of appropriating their resources.

    The eurozone seems incapable of saving itself from debt deflation, and the United States and Britain likewise are limping along as they de-industrialize. That is what leads them to hope that perhaps socialist China can save them – as long as it remains free of the financial disease. asset stripping and debt deflation. Western neoliberal economists claim that this financialization of erstwhile industrial capitalism is "progress," and even the end of history. Yet having watched China grow while their economies have remained stagnant since 2008 (except for the One Percent), their hope is that socialist China's market can save their financialized economies driven too deeply into debt to recover on their own.

    Note: Marx described productive capital investment by the formula M–C–M´, signifying money (M) invested to produce commodities (C) that sell for yet more money (M´). But the growth of "usury capital" – government bond financing for war deficits, and consumer lending (mortgages, personal loans and credit card debt) – consist of the disembodied M–M´, making money simply from money in a sterile operation.

    Footnotes

    http://michael-hudson.com/2015/10/the-paradox-of-financialized-industrialization/

    RC AKA Darryl, Ron -> RGC... January 26, 2017 at 07:32 AM

    THANKS! It was awesome, Dude and easy enough to read.

    [Feb 11, 2017] Welfare is assumed to be based upon real income and not relative income with ones group

    Feb 01, 2017 | economistsview.typepad.com

    Robert C Shelburne : January 23, 2017 at 09:10 AM

    Another good article by Rodrik but a weakness of his analysis is that welfare is assumed to be based upon real income and not relative income with ones "group".

    Most analyses of welfare find that relative income is quite important. Obviously if one assumes that one's reference group is the world, then the problem goes away; but empirically this is not the case.

    Assuming that welfare is strongly affected by relative income with a group which is smaller than the world, then global equality is no longer welfare maximizing.

    Those interested in these issues might be interested in Robert Shelburne, A Utilitarian Welfare Analysis of Trade Liberalization , available as a UN working paper.

    [Feb 11, 2017] As a result of 36 years of brainwashing large swathes of US society accept without questioning the core tenets of neoliberalism much like Soviet population accepted the key postulates of Bolshevism

    Obama was not a progressive he was a Neo liberal puppet who just spoke the language of progressives at the same time selling out the public
    Notable quotes:
    "... Still as a result of 36 years of brainwashing large swathes of US society accept without questioning the core tenets of neoliberalism much like Soviet population accepted the key postulates of Bolshevism. They believe that "the market" trumps all other forms of organization of activities of the society, that everything works better that way, that markets are virtuous. As a result, they believe in the false notion that the government is always and ever getting in the way of markets and therefore needs to be made as small and weak as possible. ..."
    "... Ideological Power derives from the human need to find ultimate meaning in life, to share norms and values, and to participate in aesthetic and ritual practices with others. ..."
    "... The main tenets of neoliberalism are still very powerfully embedded in people minds. But ideology is dead and that spells troubles the same way as death of Bolshevism spelled troubles for the USSR. ..."
    Feb 11, 2017 | economistsview.typepad.com

    libezkova -> Trump February 11, 2017 at 05:04 AM

    What has happened to "hope and change" is very straightforward: it buried Democratic Party with its lies and militarism and there is no way back.

    That's why Trump. Obama said all the right things and did the opposite. He has gutted the country and obliterated the middle class while continuing fighting wars of neoliberal expansion and conquest.

    Dismissing Trump and Trump's voters as "deplorables" gives Democrats like Krugman an excuse to avoid any self examination about how the neoliberal policies they advocated failed the majority of population of the country and have alienated electorate.

    The last two democrat presidents destroyed as much of the New Deal as their Republican counterparts and couldn't wait to gut the remnants such as SS. That's undeniable.

    As a result the key tenets of neoliberal ideology are now as dead as the key postulates of Bolshevism were in 1945. The rule of financial oligarchy disguised as "Liberal democracy", globalization and free trade, free markets as a substitute for government, deregulation, de-industrialization, letting market forces determine the characteristics of employment, etc.

    Does anybody here believes this sh*t? I doubt it. Even those who advocate it, have doubts.

    Still as a result of 36 years of brainwashing large swathes of US society accept without questioning the core tenets of neoliberalism much like Soviet population accepted the key postulates of Bolshevism. They believe that "the market" trumps all other forms of organization of activities of the society, that everything works better that way, that markets are virtuous. As a result, they believe in the false notion that the government is always and ever getting in the way of markets and therefore needs to be made as small and weak as possible.

    If you read Michael Mann's, The Sources of Social Power you will notice that he places Ideological Power first in his four component model of social power: ideological, economic, military, and political.

    Each of them create different but complementary sources of power within a given society:

    The main tenets of neoliberalism are still very powerfully embedded in people minds. But ideology is dead and that spells troubles the same way as death of Bolshevism spelled troubles for the USSR.

    See also series of Mark Blyth interviews such as

    [Feb 11, 2017] Trump is more reality based than free trade enthusiast and corporate shills who helped destroy the US by cheering on free trade de-industrialization.

    Feb 11, 2017 | economistsview.typepad.com
    libezkova : , February 10, 2017 at 08:35 PM
    The US neoliberal society is facing a lot of serious problems, in many different domains, energy, financial, political, moral. Looks like we live in the society the is either close or is entering the stage of the "perma crises" not just "secular stagnation" as before in "golden years" of Bush II and Obama.

    But our problem is not called Donald Trump. It is much deeper. He is just a symptom, an apt manifestation of our problems, if you wish.

    That's what Professor Krugman and his neoliberal friends in NYT are missing in their jeremiad against him.

    Trump at least noticed 70,000 factories were lost; robots ate homework story total nonsense : , February 10, 2017 at 09:37 PM
    Trump is more reality based than free trade enthusiast and corporate shills who helped destroy the US by cheering on free trade de-industrialization.

    Krugman et al. not aware Africa is devoid of industry while East Asia is PACKED with manufacturing and where 90% of robots are produced and used.

    Trump is about the only sentient policymaker left in America. GOD BLESS HIM AND HIS NOBLE WORK TO RESTORE THE NATION ECONOMISTS WORKED SO HARD TO DESTROY

    [Feb 10, 2017] Neoliberal globalization makes it difficult to sustain the postwar social bargain of labor peace in exchange for steadily improving worker pay and benefits

    Notable quotes:
    "... And I am not sure that it was neoliberal globalization as the only factor in rasining the standards of living in case of China. They have also industrialization process going on, give or take. Chinese maquiladoras were allowed under strict conditions of transferring technology. That's what distinguishes China from India or Mexico, where neoliberal administrations were much less protective of interest of their nations and allowed Western monopolies more freedom. ..."
    "... On the basis of careful empirical work, Rodrik concluded that "globalization makes it difficult to sustain the postwar social bargain" of labor peace in exchange for "steadily improving worker pay and benefits." ..."
    "... It's not globalization, it's "neoliberal globalization" and neoliberalism in general which killed the New Deal capitalism. As soon as the US elite realized the cookies are not enough for everybody they start withdrawing them from the table. Stagnation and the subsequent collapse of the USSR also played an important role, allowing neoliberal propagandists to claim the victory. ..."
    Feb 10, 2017 | economistsview.typepad.com
    Gibbon1 : February 10, 2017 at 01:47 AM
    ""seem unimpressed by the fact that globalization has lifted hundreds of millions of desperately poor people in China and India into the global middle class. ""

    Ergo enabling the savaging of working class people in the US was worth it.

    libezkova -> Gibbon1... , February 10, 2017 at 02:08 AM
    And I am not sure that it was neoliberal globalization as the only factor in rasining the standards of living in case of China. They have also industrialization process going on, give or take. Chinese maquiladoras were allowed under strict conditions of transferring technology. That's what distinguishes China from India or Mexico, where neoliberal administrations were much less protective of interest of their nations and allowed Western monopolies more freedom.

    After all the Communist Party is still a ruling Party of China. With a neoliberal twist yes, but they still adhere to the ideas of Marx.

    pgl : , February 10, 2017 at 01:47 AM
    Kuttner really captures the contributions of Dani Rodrik. If I had to pick one sentence to capture this review - it would be this:

    On the basis of careful empirical work, Rodrik concluded that "globalization makes it difficult to sustain the postwar social bargain" of labor peace in exchange for "steadily improving worker pay and benefits."

    libezkova -> pgl... , -1
    It's not globalization, it's "neoliberal globalization" and neoliberalism in general which killed the New Deal capitalism. As soon as the US elite realized the cookies are not enough for everybody they start withdrawing them from the table. Stagnation and the subsequent collapse of the USSR also played an important role, allowing neoliberal propagandists to claim the victory.

    [Feb 10, 2017] Ilargi The Media – Fake and False and Just Plain Nonsense naked capitalism

    Notable quotes:
    "... By Raúl Ilargi Meijer, editor of Automatic Earth. Originally published at Automatic Earth ..."
    "... British House of Commons Speaker John Bercow can play that game too. He has loudly advertized his refusal to let Trump address UK politicians in the House of Commons and the House of Lords: "An address by a foreign leader to both houses of Parliament is not an automatic right, it is an earned honor.." It's an honor recently gifted to the likes of China President Xi Jinping and the Emir of Kuwait. Fine and upstanding gentlemen in the tradition Britain so likes, nothing like the American President whom he accuses of racism and sexism. ..."
    "... The political/media black hole exists in many other countries too; we are truly entering a whole new phase in both domestic and global affairs. That is what allows for the Trumps and Le Pens of the world to appeal to people; there is nobody else left that people can have any faith in. The system(s) are broken beyond repair, and anyone perceived as belonging to them will be cast aside. Not all at the same time, but all of them nonetheless. ..."
    "... my favorite dump on trump was the times article about the special ops raid in yemen. the obama team planned it, trump pulled the trigger. now we learn the yemen government is against special ops raid. (yemen has a government?) we also learn from the times that obama wouldn't have gone through with the raid because too risky! So saint obama is the good killer, trump the bad killer. it makes you sympathetic to trump. but i think alot of us thought trump would calm down some once in office. calling judiciary names, saying they can't even understand concepts that a "bad high school student" can, is not, what's the word, adult? and you can't ignore the sinister intent behind the muslim ban–it's based on propaganda and fear–it's provenance is neocon. ..."
    "... In complete agreement with you about the dump trump article praising saint obama to the skies because obama allegedly "refused" to OK the special ops raid on Yemen, but Trump did. LIke, THIS time obama "refused" to do it? Why? Speculation is futile, but my speculation is that Obama held off in order to have it fall on Trump. Then Obama could skippity do dah off into the sunset with his burnished halo in tact. ..."
    "... Following Disturbed Voter's comment above – we can usefully distinguish 3 different levels of dishonesty by how hard they are to detect: ..."
    "... Level 1 – the everyday liar/hypocrite whose dishonesty we notice over time by observing that what they do is not consistent with what they say, ..."
    "... Level 2- the regular criminal who hides his honesty from public view, to profit from it, but can be caught by effective law enforcement, and ..."
    "... Level 3- the State Intelligence agency with extreme levels of funding, novel tech. capabilities, secrecy, & ability to ignore or even control law enforcement and large chunks of the public mass media. ..."
    "... It's the Level 3 category that society has become relatively defenseless against. Alternative media carries report after report on how the Iraq War was phony, how the US created al Qaeda and ISIS, how Cheney planned to invade Iraq and 6 other Middle East nations on Sept. 20, 2 ..."
    "... One word that describes our precious country is incompetence. We have gone from being the 'we-can-do-it' nation that put a man on the Moon to the 'hire a Mexican to do it' nation that cannot find its ass with both hands. The fact of our dysfunction and the country's reliance on migrant labor are what gives form to the efforts of Donald Trump. Yet he acts against himself: he is the lazy-man of American politics who requires others to do his heavy lifting. This does not mean physical labor but instead the struggle to become clear in the mind, to craft out of disparate- and contradictory elements a policy outline or philosophy of governing. This is never attempted, it is too difficult, instead there is the recycling of old, bankrupt memes. The candidate's absence of effort leaves a residue of personality: Trump is a blank page upon which others paint in the sketch, an actor who aims to meet (diminished) public expectations and nothing more, sound and fury significant of nothing in particular. ..."
    "... . But our problem is not called Donald Trump. And we need to stop pretending that it is. We are the problem. We allow our governments to tell our armies to bomb and drone innocent people while we watch cooking shows. We have believed, as long as we've been alive, whatever the media feed us, without any critical thought, which we reserve for choosing our next holiday destination ..."
    Feb 10, 2017 | www.nakedcapitalism.com
    Posted on February 9, 2017 by Yves Smith Yves here. In keeping with the spirit of this post, an Emerson College study found that the American public trusts Trump more than the media . And if I interpret him correctly, Ilargi's post has a small off-key note: a tomato is indeed a fruit.

    By Raúl Ilargi Meijer, editor of Automatic Earth. Originally published at Automatic Earth

    Two and a half weeks after the inauguration, and yes it's only been that long, the media still don't seem to have learned a single thing. They help the Trump campaign on an almost hourly basis by parroting whatever things, invariably judged as crazy, he says. One day it's that negative polls are all fake news, the next it's some list of underreported terror events. All of it gets an avalanche of attention provided by the very people who claim to be against Trump, but greatly help his cause by doing so.

    Not a single thing learned. If Trump tweets tomorrow that tomatoes are really fruits and he's going to have someone draw up a law to make them so, or that Lego should be recognized as an official building material in order to have the Danes, too, pay for the wall, it will be on the front page of every paper and the opening item for every TV news show. The crazier he makes them, the more serious they are taken. The echo chamber is so eager to incessantly repeat to itself and all its inhabitants that he's a crazy dude, it's beyond embarrassing.

    And it takes us ever further away, and rapidly too, from any serious discussion about serious issues, the one very thing that the Trump empire desperately calls for. The press should simply ignore the crazy stuff and focus on what's real, but they can't bring themselves to do so for fear of losing ratings and ad revenues. All Trump needs to do, and that's not a joke, is to fart or burp into their echo chamber and they'll all be happy and giddy and all excited and self-satisfied. A spectacle to behold if ever there was one.

    British House of Commons Speaker John Bercow can play that game too. He has loudly advertized his refusal to let Trump address UK politicians in the House of Commons and the House of Lords: "An address by a foreign leader to both houses of Parliament is not an automatic right, it is an earned honor.." It's an honor recently gifted to the likes of China President Xi Jinping and the Emir of Kuwait. Fine and upstanding gentlemen in the tradition Britain so likes, nothing like the American President whom he accuses of racism and sexism.

    The racism part ostensibly is a reaction to Trump's Muslim ban, which, nutty though it is, is not a Muslim ban because most Muslims are not affected by it, and besides, 'Muslim' is not a race. So maybe Bercow would care to explain the 'racism' bit. Has anyone seen the British press pressuring him to do so? Or, alternatively, has anyone seen a thorough analysis of the British role, though its military and its weapons manufacturers, in the premature deaths in the Middle East and North Africa of many thousands of men, women and children belonging to the Muslim 'race'? Not me.

    The 'sexism' accusation refers to Trump's utterances on for instance the Billy Bush tape(s), and by all means let's get the Donald to comment on that. But this comes from a man who speaks as an official representative of the Queen of a country where child sex abuse is a national sport, from politics to churches to football, where literally thousands of children are trying to speak up and testify, after having been silenced, ignored and ridiculed for years, about the unspeakable experiences in their childhood. Surely someone who because of his job description gets to speak in the name of the Queen can be expected to address the behavior of her own subjects before that of strangers.

    Yeah, that Trump guy is a real terrible person. And he should not be allowed to speak to a chamber full of people directly responsible for the death of huge numbers of children in far away sandboxes, for or the abuse of them at home. After all, we're all good Christians and the good book teaches us about "the beam out of thine own eye". So we're good to go.

    What this really tells you is to what extent the political systems in the US and the UK, along with the media that serve them, have turned into a massive void, a vortex, a black hole from which any reflection, criticism or self-awareness can no longer escape. By endlessly and relentlessly pointing to someone, anyone, outside of their own circle of 'righteousness' and political correctness, they have all managed to implant one view of reality in their voters and viewers, while at the same time engaging in the very behavior they accuse the people of that they point to. For profit.

    Child sex abuse has been a staple of British society for a long time, we're talking at least decades. Only now is it starting, but only starting, to be recognized as the vile problem it is. But still many Britons feel entirely justified in demonizing a man who once talked about touching the genitals of grown women. If that did happen against their will, it's repulsive. But still, there's that beam, guys. Read your bible.

    The political/media black hole exists in many other countries too; we are truly entering a whole new phase in both domestic and global affairs. That is what allows for the Trumps and Le Pens of the world to appeal to people; there is nobody else left that people can have any faith in. The system(s) are broken beyond repair, and anyone perceived as belonging to them will be cast aside. Not all at the same time, but all of them nonetheless.

    Whether you call the menu the people have been fed, fake or false or just plain nonsense, it makes no difference. The British House of Commons Speaker may not be such a bad guy inside, he's probably just another victim of the falsehoods, denials and deceit spread 24/7. The difference between them and ordinary citizens is that Her Majesty's representatives in the political field MUST know. They get paid good salaries to represent the Queen's subjects, and looking the other way as children get assaulted and raped does not fit their job description.

    That goes for representatives of the church (i.e. Jesus) just as much of course, and for the execs at the BBC, but about as many of those people are behind bars as there are bankers. For anyone at all at any of these institutions to now speak with great indignation about Trump's alleged racism and sexism is the very core of all of their problems, the very reason why so many turn their backs on them. It shows that the very core or our societies is rotten, and the rot is spreading.

    We are facing a lot of problems, all of us, in many different ways, financially, politically, morally. But our problem is not called Donald Trump. And we need to stop pretending that it is. We are the problem. We allow our governments to tell our armies to bomb and drone innocent people while we watch cooking shows. We have believed, as long as we've been alive, whatever the media feed us, without any critical thought, which we reserve for choosing our next holiday destination.

    The longer this braindead attitude prevails, the worse things will get, and the more Trumps will surface as leaders of their respective countries. And the longer the attitude prevails, the more anger we will spread in those parts of the world that do not belong to our 'chosen' societies. And for that we will have only ourselves to blame. Not Trump.

    Disturbed Voter , February 9, 2017 at 3:14 am

    Citizens and politicians are in a social compact, so it is said. Both sides may have defaulted on the agreement, something the Enlightenment didn't anticipate. In the modern era of triangulation, opposition parties, that used to keep each other relatively honest, no longer do that. In the modern era of media consolidation, opposition newspapers, that used to keep each other relatively honest, no longer do that. Be are being suffocated by de facto bi-partisanship, that is just a shadow play of its former partisanship. The status quo has gone stale.

    geoffrey gray , February 9, 2017 at 3:37 am

    my favorite dump on trump was the times article about the special ops raid in yemen. the obama team planned it, trump pulled the trigger. now we learn the yemen government is against special ops raid. (yemen has a government?) we also learn from the times that obama wouldn't have gone through with the raid because too risky! So saint obama is the good killer, trump the bad killer. it makes you sympathetic to trump. but i think alot of us thought trump would calm down some once in office. calling judiciary names, saying they can't even understand concepts that a "bad high school student" can, is not, what's the word, adult? and you can't ignore the sinister intent behind the muslim ban–it's based on propaganda and fear–it's provenance is neocon.

    RUKidding , February 9, 2017 at 10:43 am

    In complete agreement with you about the dump trump article praising saint obama to the skies because obama allegedly "refused" to OK the special ops raid on Yemen, but Trump did. LIke, THIS time obama "refused" to do it? Why? Speculation is futile, but my speculation is that Obama held off in order to have it fall on Trump. Then Obama could skippity do dah off into the sunset with his burnished halo in tact.

    Gah.

    Agree with the second part of your comment, too. I wish Trump would behave differently. The comment about the judiciary was incredibly wrong and also very stupid. His fervent fans may well clap and cheer for that, but Trump is painting himself into some corners by behaving that way. The Judiciary and lawyers – a powerful group in this nation, for better or worse – simply aren't going to take that laying down. Although I'm sure the judiciary will (mostly) strive for objective impartiality.

    The stupid media would serve themselves, their Oligarch owners, and the nation better if they ignored the bulk of Trump's dumb tweets and focus more closely on what he and his Admin are doing.

    Josh Stern , February 9, 2017 at 3:39 am

    Following Disturbed Voter's comment above – we can usefully distinguish 3 different levels of dishonesty by how hard they are to detect:

    • Level 1 – the everyday liar/hypocrite whose dishonesty we notice over time by observing that what they do is not consistent with what they say,
    • Level 2- the regular criminal who hides his honesty from public view, to profit from it, but can be caught by effective law enforcement, and
    • Level 3- the State Intelligence agency with extreme levels of funding, novel tech. capabilities, secrecy, & ability to ignore or even control law enforcement and large chunks of the public mass media.

    It's the Level 3 category that society has become relatively defenseless against. Alternative media carries report after report on how the Iraq War was phony, how the US created al Qaeda and ISIS, how Cheney planned to invade Iraq and 6 other Middle East nations on Sept. 20, 2001 – not because of any links to US created al Qaeda – and a big chunk of that plan is still being carried out today, 4 Presidential terms later.

    Disturbed Voter , February 9, 2017 at 7:10 am

    While we don't know much about what the intelligence agencies do, by design, we do know a few things. That in the conditions of the early Cold War, and given the mandate against all enemies foreign and domestic (the oath the military takes) that narrative control is a vital weapon. We know that journalists, clergy and even rock stars have been actual agents, so the number of fellow travelers must be considerable. Since the fall of the Soviet Union, it has been necessary, so it was thought by some, to manufacture new enemies on a Vietnam scale. And the exercise and paranoia against domestic enemies has returned to 1960s levels as well. For the old men nostalgic for the 60s, from the neocon side, these last few decades have been sweet.

    Moneta , February 9, 2017 at 7:37 am

    Actually it's the level 1 that leads to level 3.

    Materially, all we really need is to cover and protect our body from the elements and food. Everything else is gravy.

    Psychologically, we need a lot more than what North American society offers most of us today but for some reasons we keep on lying to ourselves thinking that if we had a little more stuff we'd be happier.

    We all have to lie to ourselves thousands of times a day to keep our routines and lifestyles and all these lies make society.

    Jos Oskam , February 9, 2017 at 3:54 am

    Hey Yves, the tomato question does seem to have something to it: "Nix v. Hedden (1893) was a decision by the Supreme Court of the United States that, under U.S. customs regulations, the tomato should be classified as a vegetable rather than a fruit". From Wikipedia: https://en.wikipedia.org/wiki/Nix_v._Hedden .

    Note to Ilargi: re tomatoes, somebody got there before Trump :-)

    Gaylord , February 9, 2017 at 4:24 am

    I think a great number of people in the US and in Europe do not trust the MSM any more, even though they may continue to pay attention as a spectator sport (people do enjoy yelling at their TV sets). Activism is another ball game that is still being played, but in the US it has become nearly futile because of the restrictions and police tactics used to squelch them or shut them down. It can also be impossible to distinguish between genuine protesters, paid participants, and shit-disturbers or agents-provocateurs, which dilutes the message (questionable intent by those who want to promote or discredit the demonstration).

    Having read the comments here and on other independent sites for a long time, I've noticed the tremendous increase in articulate and aware commenters that can see through the tissues of lies from the MSM and take even a lot of the "serious" stuff with a grain of salt, knowing that some things don't change much and people tend to overreact based on shock-value news designed to stir resentment and "us vs. them" divisiveness. This is encouraging because it shows people are wising up, thinking more critically about who is really running the show (it is not Trump by-and-large), and not allowing their views to be manipulated.

    european , February 9, 2017 at 4:57 am

    I think Ukraine was a turning point, as the lying of the media was just way too obvious. That opened a lot of eyes. The reporting on Greece and Merkel/Schäuble's austerity terror was equally bad, but not many people understand that.

    Syria: The Media Coverage on Syria is the Biggest Media Lie of our Time

    KurtisMayfield , February 9, 2017 at 8:10 am

    I believe it was Iraq. When they named the 2003 invasion Operation Iraqi Liberation, or O.I.L. , all the pretense of it being for any legit reason was gone.

    Arizona Slim , February 9, 2017 at 8:35 am

    Ah, yes. The Iraq invasion. Wasn't it supposed to be about our freedom?

    RUKidding , February 9, 2017 at 10:45 am

    We citizens were also supposed to get our Iraqi oil dividend back, which allegedly would pay for that many trillion dollar exercise in futility.

    Guess that got syphoned right up into Dick Cheney's pockets. Ya snooze, ya lose.

    OpenThePodBayDoorsHAL , February 9, 2017 at 3:20 pm

    Huh? Iraq? Did I miss something?
    I heard about some thingy where we wasted trillions of dollars and killed millions of people. But all of the people who thought THAT was a good idea are gone now, hiding their heads in shame and hoping they don't get summoned to a war crimes tribunal. Right?

    polecat , February 9, 2017 at 4:35 pm

    No. They HAVE NO shame !

    BeliTsair , February 9, 2017 at 11:42 am

    I believe it was the Gnadenhutten massacre. The 96 Moravian Lenape, brained with mallets, by Washington's Virginia Militia were probably too busy clawing through their former frozen fields, looking for corn kernels to feed their children, to pose much of a threat as terrorists?

    VietnamVet , February 9, 2017 at 4:23 pm

    Yes, what got to me was the Western instigated coup in Ukraine. I voted for Barrack Obama twice but could not vote for Hillary Clinton. I rationalized that the Iraq Invasion was an isolated crazy GOP debacle. Denial is powerful defense mechanism. If the media lies, America is a not so innocent killer, and the Cold War 2.0 with Russia has reignited; we are screwed. Austerity, scapegoating Russia and the flood of millions of refugees into Europe are proof that this is the awful truth.

    running dog lackey , February 9, 2017 at 4:31 am

    It's about ratings people. The president of NBC himself said it during the campaign when someone asked why he was televising everything the Insane Clown was saying. You all need to watch Network again. Nothing's changed. Which means they brought him up and now they will take him down.

    Tom , February 9, 2017 at 6:03 am

    Ratings are to broadcast or print media as shareholder value is to corporation - the overriding metric that blots out any reponsibility to the commons.

    Chris G , February 9, 2017 at 5:45 am

    "The Speaker may not be such a bad guy inside". Ah, not so. Check out this Pat Lang post,

    http://turcopolier.typepad.com/sic_semper_tyrannis/2017/02/the-mother-of-all-parliaments.html

    and the long trenchant comment by LondonBob including these paras:

    "The Twitter-cheering for John Bercow, the transformation of him into a Love, Actually-style hero of British middle-class probity against a gruff, migrant-banning Yank, could be the most grotesque political spectacle of the year so far. Not because it's virtue-signalling, as claimed by the handful of brave critics who've raised their heads above the online orgy of brown-nosing to wonder if Bercow is really promoting himself rather than parliamentary decency. No, it's worse than that. It's the lowest species of cant, hypocrisy of epic, eye-watering proportions, an effort to erase Bercow's and Parliament's own bloody responsibility for the calamities in the Middle East that Trump is now merely responding to, albeit very badly.

    "Bercow, you see, this supposed hero of the refugees and Middle Eastern migrants temporarily banned from the US, voted for the bombing of Iraq. He green-lighted that horror that did so much to propel the Middle East into the pit of sorrow and savagery it currently finds itself. As his profile on the They Work For You website puts it, 'John Bercow consistently voted for the Iraq War'. On 18 March 2003, he voted against a motion saying the case for war hadn't been made, even though it hadn't. On the same day he voted for the government to 'use all means necessary' to ensure the destruction of Iraq's WMD.

    "As everyone knows now, and as many of us knew back then, Iraq's WMD capacity had been vastly exaggerated by the black propaganda of the New Labour government, by myth and misinformation cynically whipped up to the end of providing Britain's leaders with the thrill of an overseas moral crusade against evil. Bercow voted in favour of these lies. And he voted for the use of 'all means necessary' to tame Saddam's regime. We know what this involved: Britain joined the bombing campaign and courtesy of an ill-thought-through war by Western allies, Iraq was ripped apart and condemned to more than a decade of bloodshed. And refugee crises. Bercow was one of the authors of this calamity, one of the signatories to the Middle East's death warrant, and now we're going to let him posture and preen against Trump's three-month ban on certain Middle Eastern migrants? What is wrong with us?"

    But kudos to kind-hearted Ilargi for willingness to give the benefit of the doubt to one of these preening monsters!

    jackiebass , February 9, 2017 at 6:19 am

    Trump loves any kind of publicity. The media is playing right into his hand by printing all of the garbage he generates.I know many Trump voters and supporters. They all complain that the media is picking on Trump. None of them look seriously at what he says or does. There universal reaction is give him a chance and quit picking on him.The media would be better off focusing on his and congreses policy decisions and how that effect the average person. Turning he's presidency into a big soap opera is actually helping Trump keep his supporters. I have not heard a single Trump voter say they regret voting for Trump.

    Eustache de Saint Pierre , February 9, 2017 at 6:35 am

    Good to see some focus on Britain's version of the Augean stables. In terms of the so called Westminster paedophile ring – the last I heard on this it was that, Ooops .we appear to have lost a substantial amount of vital evidence. I imagine that MI6 have on record most if not all of the disgusting details, which I also imagine are useful assets that can be used to control certain people.

    In my opinion, this is a good explanation from 2015, of the behaviour of the BBC & the Guardian, from journalist Jonathon Cook.

    http://www.jonathan-cook.net/blog/2015-03-03/hsbc-and-the-sham-of-guardians-scott-trust/

    The Trumpening , February 9, 2017 at 7:54 am

    So far Trump has only really accomplished two things: he shut down the TPP and he inspired Lena Dunham to lose some weight. Everything thing else has been more or less noise.

    I've always thought this first two years of Trump's reign will involve him in bringing to heal the establishment GOP (GOPe) Obviously during the confirmation process, Trump has to be on his best behavior. But I don't like the pattern of Trump issuing useless EO's, and then the Democrats going ballistic, and then Trump supporters being satiated by all the Dem whining. That's a recipe for two years of nothing.

    On the Muslim ban, there are two parts to it. The current NeoCon / NeoLib tag-team play is to kill a million Muslims in their nations and then to offer the survivors the weak reach around of letting a million Muslims emigrate to the West. Trump seems to be offering a different deal. The West stops killing Muslims in Muslim nations and in return Muslims stay in Muslim nations and stop coming to the West. We have yet to see if Trump can hold off the temptation to start slaughtering Muslims in their nations like the NeoCons do.

    I get the feeling from Trump's over-the-top reaction to the courts staying his Muslim ban that he actually doesn't want it reinstated. I read on a pro-Trump legal blog that the Justice Department lawyers were super weak in their arguments before the 9th Circuit court, in what should be a super easy case to argue. Activist judges halting the ban means when the inevitable next terrorist attack comes, Trump can blame it on the judges and make some sort of move to purge their power.

    On Iran, Trump has zero leverage and so I do not see how this is going to end well. The only thing we can hope for is this is a bit of Kabuki being regulated by Putin. In the end a US-Russian alliance, as Trump is proposing, means a closer relationship between the US and Iran. Israel will not be pleased.

    My theory on Trump's relationship to Israel is that he is giving them enough rope for them to hang themselves. In Europe particularly the Israeli brand is getting fatally interwoven with the Trump brand. So far the only thing saving Israel is diaspora Jews being able to shame their local populations away from the BDS movement. But the diaspora is 98% anti-Trump. There is currently a huge increase of oxygen being given to the BDS movement, which means it should soon spring back to life.

    Can Trump be allies with Israel and Russia (and Iran)? The only way I can see this happening is a deal where Iran gets to go nuclear and become fully integrated into the global community in exchange for allowing Hezbollah to be wiped out by Israel.

    Trump is at his anti-NeoLiberal best when he is in deep trouble. I was happy when that Access Hollywood tape came out because I knew he would have to double down on Steve Bannon and Stephen Miller and go full-on butch economic nationalist. And it won him the election. Hopefully the seas will get very rough soon and we can all enjoy the spectacle of full combat between Team Trump and the GOPe.

    OpenThePodBayDoorsHAL , February 9, 2017 at 3:31 pm

    I like the "offer the survivors a weak reacharound". Reminds me of Vietnam, where we would napalm a village and then fall over ourselves making sure the burn victims all got Band-Aids

    Fiver , February 9, 2017 at 5:09 pm

    The entire Trump military/security team is wildly anti-Muslim, so the thought they are not going to keep on killing Muslims all over the map is just plain silly.

    Bannon is just plain dangerous. Here's a piece on his favorite books. Not surprisingly, he hates Muslims. Also, he appears to imagine himself a brilliant strategist for the ages who just happens to be the right man for 'The Fourth Turning', one of those ideas and books that purports the existence of an historical pattern based on a cycle of generations, each generation of every group of 4 having its own 'character', taken together claiming to explain a long cycle of great crises and/or turning points of US history. He believes we are now in such a critical period. It's one of those notions that has superficial appeal but quickly falls apart when engaged critically:

    https://www.washingtonpost.com/news/powerpost/paloma/daily-202/2017/02/07/daily-202-five-books-to-understand-stephen-k-bannon/58991fd7e9b69b1406c75c93/

    http://rationalwiki.org/wiki/William_Strauss_and_Neil_Howe

    Bannon is now running stuff via Briebart's network that will make your hair stand on end:

    http://townhall.com/columnists/kurtschlichter/2017/02/06/the-left-hates-you-act-accordingly-n2281602?utm_source=TopBreakingNewsCarousel&utm_medium=story&utm_campaign=BreakingNewsCarousel

    As for Israel, there is not the remotest chance Trump will do something Israel doesn't like – even if he doesn't appoint Elliot Abrams to #2 at State.

    http://www.cnn.com/2017/02/06/politics/elliott-abrams-state-department/

    Here's what Ron Paul thought of that idea:

    http://www.ronpaulinstitute.org/archives/featured-articles/2017/february/07/elliott-abrams-to-state-dept-you-cant-be-serious/

    http://www.cnn.com/2017/02/06/politics/elliott-abrams-state-department/

    Abrams would be an absolute disaster.

    TPP? Globalization? I see no evidence whatever that Trump has any intention of rolling back US-dominated corporate globalization, rather, he wants to create trade flows that are even more wildly skewed in favour of US financial/corporate power internationally even while effectively transferring wealth from the periphery to core of Empire to support some minor job creation – of course in the meantime granting outlandish tax cuts to corporations and the wealthy at large.

    I'm sorry, but Trump et al have played millions and millions of well-meaning Americans like a fiddle.

    UnhingedBecauseLucid , February 9, 2017 at 8:44 am

    The best description of the "Trump Situation" ever written was penned by 'Steve from Virginia' author of the blog Economic Undertow:

    One word that describes our precious country is incompetence. We have gone from being the 'we-can-do-it' nation that put a man on the Moon to the 'hire a Mexican to do it' nation that cannot find its ass with both hands. The fact of our dysfunction and the country's reliance on migrant labor are what gives form to the efforts of Donald Trump. Yet he acts against himself: he is the lazy-man of American politics who requires others to do his heavy lifting. This does not mean physical labor but instead the struggle to become clear in the mind, to craft out of disparate- and contradictory elements a policy outline or philosophy of governing. This is never attempted, it is too difficult, instead there is the recycling of old, bankrupt memes. The candidate's absence of effort leaves a residue of personality: Trump is a blank page upon which others paint in the sketch, an actor who aims to meet (diminished) public expectations and nothing more, sound and fury significant of nothing in particular.

    bbrawley , February 9, 2017 at 9:09 am

    I'm surprised no one seems to see a serious side to the reporting of Trump's antics. Is it not important to keep hammering home that the man is unhinged and that this is something pulling at the social frabric, something crying out to be dealt with? I seriously doubt that we'll be able to address the "real issues" adequately until we find ways come to terms with him not as a buffoon but as a deeply flawed human being.

    Donald , February 9, 2017 at 9:37 am

    Another false note–"Muslim is not a race." True, but being Jewish is not a racial characteristic and yet it is obvious that antisemitism is very similar to racism in its irrationality and hatred. Antisemites a hundred years ago would in some cases point to radicals who were Jewish as their excuse, just as Islamophobes would point to Islamic extremism as theirs. Racists I grew around would point to Idi Amin's Uganda ( yes, I am old) and other African countries with horrible human rights records as proof that American blacks should be grateful to be here.

    This "Islam is not a race" is mainly a tiresome distraction used by bigots and not a prelude to a deeper discussion on the wide varieties of human bigotries. Bigots can use almost any category they wish and concoct pseudo- rational propositions to buttress their hatred. We even have lefties hating blue collar white males as a group for Trump support. We don't have to join the people who use nitpicking phrases not to analyze, but to justify their hatreds. I don't think the writer intends to do this, but he is using a standard Muslim blame cannon phrase.

    After all this, I actually liked the rest of this piece, but that part was nails on a chalkboard to me. I am glad the liberal mainstream is siding with Muslims against Trump. There are some liberals ( Maher, Sam Harris etc..) who have been pushing a Muslim bashing agenda. And yes, as usual the mainstream which is so solicitous of Muslim rights cared little when Obama bombed Muslim countries. But I would rather that liberals be right if hypocritical then consistently wrong.

    Optimader , February 9, 2017 at 10:50 am

    As far as the term Racism, i think https://en.m.wikipedia.org/wiki/Racism oretty well captures contemporary common use.

    You forgot to mention Zionist racism directed toward Palestinians. An equally equivalent contemporary application of the term

    On the subject of Trump i believe his executive order is directed toward travelers from seven countries that the previous Potus identified in an anti-terrorist executive order.
    If I have it correctly, Neither Trump or BHO e orders are directed against muslims or any other religion for thats matter.

    Optimader , February 9, 2017 at 10:56 am

    As well do we need to take a deerpath in the woods debate about the legitimacy of the term race?

    Donald , February 9, 2017 at 12:43 pm

    I agree with you on Zionist racism towards Palestinians.

    On the deep path on the definition of racism, it depends. Given the prevalence of Islamophobia in the US, some of it on the left ( including the kneejerk supporters of Israel), I don't think it is helpful to use the "Islam is not a race" phrase as some sort of rebuttal. Islamophobia is a form of bigotry– whether one wants to nitpick about exactly what form should depend on the circumstances.

    Yves Smith Post author , February 9, 2017 at 1:42 pm

    I do not believe in the corruption of language. Confucius said that the beginning of wisdom is to call things by their proper names.

    Are you by the same sloppy logic going to cal bias against women and gays "racism"?

    Islamophobia is indeed not racist. Arabs, many American and African blacks, Persians (who are not Arabians) and Indonesians among others are followers of Islam.

    We already have perfectly good works, like "bigotry," "bias," and "discrimination".

    Donald , February 9, 2017 at 2:50 pm

    I probably shouldn't have said anything, since the original poster clearly isn't a bigot, but it set me off because in most cases this "Islam is not a race" phrase is used by Islamophibes and they of course do not follow up by pointing out that it is a form of bigotry, like antisemitism. If the poster here only means we should call it bigotry and not racism, I agree.

    But that meme is used a lot and usually by Islamophobes who won't cop to being bigots either. They aren't trying to have a deep conversation about different forms of bigotry. They are trying to argue that it is rational to fear Muslims because Islam is, in their view, an inherently evil ideology. But in practice Islamophobes are not rational or necessarily even consistent. That's why I wrote my comment, pointing out that bigotry in any form is generally not some carefully thought out logical train of thought, but some pseudo- rational set of propositions often garbled together. This is why a Sikh can get beaten up by Islamophobes. It is also why antisemites are often so confused about whether they hate Jews as a religion, as an alleged race, or as some group of scary communist bankers. It's not like racism itself is usually based on a clear understanding of biology.

    So if we are going to push back on Islamophobia as racism, it should be so people see it as like antisemitism, which is what it most closely resembles.

    I have written enough today, so I am going to stop.

    optimader , February 9, 2017 at 3:44 pm

    Re Confucius, George Orwell had his thoughts along those lines. re: intentional corruption of language.

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

    The reality is language evolves, often for the worse making clarity of message a casualty, unless a tedious definition of terms is invoked which can easily end up being a form of deflection from the original point.. ..
    File under :Liberal/Conservative/Neoliberal/Progressive. I find all these Identity Labels can be very loosely applied for reasons other than clarity.

    In the case of the word Race, it is, some would correctly contend, archaic terminology while simultaneously being convenient shorthand for "red meat" identity invectives.

    River , February 9, 2017 at 12:20 pm

    Muslim isn't a race. If the ban had been about Arabs not being allowed in you'd have a point. However, a person from Indonesia is allowed in and that country is almost entirely Muslim.

    Plus, complaining about the US exercising boarder control is ridiculous. That is one the jobs of a nation. No one bat an eye when Japan stated we're not allowing anyone in wrt to any refugee problem. Yet when any Western nation does it, the sky falls and the charges of bigotry come out.

    No one has the right to move to another country.

    Donald , February 9, 2017 at 12:41 pm

    People who live in countries that are bombed by the US or its close allies have the moral right to come here. Yemen, for instance, is bombed by the US and much more heavily by the Saudis with our help and keeping refugees from Yemen out is an extreme form of ugly Americanism. If we don't want the refugees, then we should stop causing or contributing to the chaos and death in the countries which produce the refugees.

    Gorgar Laughed , February 9, 2017 at 1:12 pm

    >People who live in countries that are bombed by the US or its close allies have the moral right to come here.

    And where are these rights enumerated? I don't recognize "moral rights" beyond those associated with copyright (and I am not particularly fond of those, either).

    Donald , February 9, 2017 at 1:17 pm

    So the fact that we are bombing civilians and helping the Saudis plunge Yemen into a famine is something you don't question, just the right of our victims to come here?

    Gorgar Laughed , February 9, 2017 at 1:58 pm

    Not fond of herring, either.

    "Our victims"?

    The legacy of Obama's incompetence in foreign policy does not obligate American citizens to accept - or to foist upon their posterity - changes in the demographic make-up of our populace.

    I'm still interested in learning where you discovered this moral right to move here

    Donald , February 9, 2017 at 2:11 pm

    Not fond of herring either?

    In other words, morality is a matter of preference and your number one moral value in this context is keeping out refugees, people who suffer precisely because of our foreign policy. Demographic balance is somewhere near the top of your own personal list of flavors. Anyway, my notion of moral right involves the crazy idea that if you help destroy a country you have moral obligations to the victims.

    And by the way, Trump is likely to escalate our support for the Saudi war on Yemen.

    OpenThePodBayDoorsHAL , February 9, 2017 at 3:37 pm

    LOL it certainly was a matter of preference for our recently departed Drone-Bomber-In-Chief, and for all of the people who (thought/think) he was a really moral and upstanding kind of guy. Just like our former Secretary of State, who threatened to cut off Sweden if they didn't accept Monsanto poison.
    "You're black!" said the pot to the kettle

    Optimader , February 9, 2017 at 1:22 pm

    "People who live in countries that are bombed by the US or its close allies have the moral right to come here."

    Bullsht.
    The US does have the moral obligation not to bomb countries that have not attacked the US and in that case only in a "just war" context if at all

    Donald , February 9, 2017 at 1:57 pm

    Meaningless. The US frequently bombs innocent people or helps others like the Saudis or the Israelis do so. You say it is wrong, as do I, but apparently there are no consequences allowed in your moral universe which might inconvenience us. We really have no moral obligations at all– we can bomb people and if the survivors wish to come here to escape then we have the right to keep them out according to you. All this boils down to is that we have the strongest military. Your views regarding whether we should bomb someone are nothing more than your own idiosyncratic preference and that is using your own standard. The people who control the military want to use it to bomb other countries, so they do. Might makes Right.

    bob , February 9, 2017 at 2:10 pm

    " Your views regarding whether we should bomb someone are nothing more than your own idiosyncratic preference and that is using your own standard."

    "The US does have the moral obligation not to bomb countries that have not attacked the US and in that case only in a "just war" context if at all"

    Can't read, or don't want to?

    Donald , February 9, 2017 at 2:14 pm

    I read it. So what? If we go ahead and bomb countries anyway, creating refugees, we have no obligation to help them. It is like saying that it was wrong for some Wall Street guys to steal people's money, but if they do, they have no obligation to give it back.

    bob , February 9, 2017 at 2:38 pm

    "I read it. So what? If we go ahead and bomb countries anyway"

    If we go ahead and assume that the earth is flat, why shouldn't "we" all relocate another planet?

    It's just that simple, and your keyboard strawmanning is making all the difference, for "we".

    Ground rules- am I arguing with "Donald" or the Royal We, or a heap of straw that you, pardon We(?), keep producing?

    Donald , February 9, 2017 at 2:56 pm

    The US does bomb countries, so your flat earth analogy doesn't really work here. We aren't discussing hypotheticals. There are real refugees from real policies and Trump is likely to continue them or make them worse. We are directly responsible for the misery of vast numbers of people and the numbers are likely to grow. Set aside the internet squabble we are having, because you are so wrapped up in it you are losing touch with what we are arguing about.

    Anyway, as I just wrote upthread, I have written enough.

    bob , February 9, 2017 at 4:06 pm

    "Anyway, as I just wrote upthread, I have written enough."

    That we'll agree on. Maybe another day you can elucidate on why you bother writing when you could find an airbase and stand on the runway, to stop the bombing.

    Anon , February 9, 2017 at 12:49 pm

    No one has the right to move to another country.

    Even after their homeland has been bombed, invaded, population tortured, social structure crushed?

    River , February 9, 2017 at 1:18 pm

    No they don't have that right. It falls under "that's your problem".

    Now, as harsh as that is I think from a humanitarian view and basic decency another nation should show some compassion and allow them succor. However, nations and the people of those nations are under no obligation to do so.

    Moral rights are meaningless. And yes, I do agree that another nation shouldn't create the refugees to begin with. As I find war to be a tool that is to be used as last resort. What has been occurring in the mid-East has been so far from a last resort that I can't even come up with a decent metaphor or simile.

    But that still doesn't change the fact that people do not have the right to enter another nation if the nation decides to say "No".

    Donald , February 9, 2017 at 1:48 pm

    So if we go ahead and bomb Yemen or help the Saudis bomb Yemen, it really doesn't matter at all. We are responsible for war crimes, but we have zero obligation to help the victims.

    You switch back and forth between talk of morality and the law of the strongest. You say we shouldn't bomb other countries for no good reason, but that is as much a meaningless platitude as you say moral rights are in general. Basically you find it distasteful that we bomb other countries, but what really exercises you is the possibility that some refugees might come here. That will not stand.

    Gorgar Laughed , February 9, 2017 at 2:11 pm

    Have you ever heard of the Melian Dialogue?

    There is a nice little re-enactment of it over at the Youtubes

    Donald , February 9, 2017 at 2:18 pm

    Yep. The strong do what they can and the weak do what they must. Nihilistic, but certainly a viewpoint I expect would be popular with the powerful.

    Gorgar Laughed , February 9, 2017 at 2:54 pm

    You miss the point. Realism is not nihilism.

    The Athenians had no good reason to suppose that the Gods would not favor them.

    There was nothing in their laws or beliefs to suggest otherwise.

    Similarly, there is nothing in our laws that requires us to accept population transfers because this or that President drops bombs in a far away country on people of whom we know nothing.

    Yves Smith Post author , February 9, 2017 at 2:20 pm

    Anon is correct. We can be obligated to bomb other countries by treaty. For instance, we bombed France to oust the Nazis as a result of treaty obligations. It is also correct to say that the US has been flagrantly ignoring what were considered to be international norms (pretty much no one notices here, but Russia has been making a stink on a regular basis in the UN).

    PKMKII , February 9, 2017 at 10:16 am

    Any day since 1/20, you could look at the front page of WaPo, NYT, CNN, etc., and see op-eds about how Trump is very very non-professional, sullying the good name of the office of the President. Denigrating the institution and the very very serious role it plays in American society, nay, the world! And yet the same front page will also cover, in-detail, whatever halfbaked Trump tweet or Spicer's performance-art-as-press-conference has been served up that day. They recognize that it's become a farce, but like someone who can't stop poking the tooth that hurts, they present the farce as being very very important news. The establishment press has become too enamored of the pomp and circumstance, the ceremonial of the White House media operation and their visible, although largely pointless, role in the whole thing. They're too scared of giving that up, lest they lose prominence or, le horror, have to do real reporting. So the Washington press corp prop up their end of the ceremony in the vain hopes of a return to the way things were, in denial of how their function is quickly becoming redundant. If all they're going to do is talk about Trump's latest tweet, we might as well just stop reading their sites and just read his tweets ourselves. Social media can just give us the press releases directly, we don't need the press to act as town criers, screeching out Trump's decree in the town squares.

    flora , February 9, 2017 at 10:24 am

    an aside re Yves intro:

    "Emerson College study found that the American public trusts Trump more than the media. "

    The WaPo's attempt to turn readers away from great sites like NC with their "fake news" story has backfired spectacularly. Thanks to NC and others furious initial pushback, including well crafted letters from NC's atty and the recipients responses published on NC, the term "fake news" has become a joke in the court of public opinion. It's become a subject for comedy skits. This is no small thing. Actually, it's a pretty big thing. McCarthist witch hunts live and die in the court of public opinion, imo. See: Joseph Welch, "Have you no sense of decency sir?"
    https://www.youtube.com/watch?v=K1eA5bUzVjA

    And with that exchange the court of public opinion turned against McCarthy and the witch hunt. Now where was I going with this ?

    john bougearel , February 9, 2017 at 10:51 am

    Ha! How dare ya attack my favorite cooking shows! LOL

    Gorgar Laughed , February 9, 2017 at 12:07 pm

    >After all, we're all good Christians

    Who's "We" Paleface? Bercow's not a Christian.

    And it looks as though we may finally be seeing the worm turn on the kiddie rape: the Rochdale rape gang is now set to be deported to Pakistan.

    Local MP Simon Danczuk: "Foreign-born criminals should not be able to hide behind human rights laws to avoid deportation."

    I suspect this line of thinking is going to be picked up in other countries on the Continent, and sooner rather than later.

    Once we start seeing child sex investigations target the English ruling class, we will know that we are getting somewhere

    Blurtman , February 9, 2017 at 1:03 pm

    Hispanic isn't a race, nor is Latino, but that has not stopped the MSM, bleeding hearts and SJW's from emoting.

    PKMKII , February 9, 2017 at 1:46 pm

    I was a census worker in 2010, and the forms didn't include Hispanic/Latino as a race; rather, it was put as a separate identity category with sub-answers for specific country of ancestral origin. However, 9 times out of 10 Hispanic responds would have me put "Hispanic" in the write-in box for the "Other" race option (the other 10% would have me write-in their ancestral country). The smarties with the degrees can say it's not a race, but if the people say that's their race, who are we to say otherwise?

    Blurtman , February 9, 2017 at 3:25 pm

    Ask Rachel Dolezal. Or perhaps Elizabeth Warren, an undocumented Native American (i.e., Indian). And yes, Pew Research would agree that folks who consider themselves to be Latino consider Latino to be a race. But most are Native American.

    But not anyone can be recognized as Native American in the USA unless they are on a tribal register, which is odd, as the USG seems to subject Native American citizens to a higher level of proof than Native Americans from south of the border.

    Anon y Mouse , February 9, 2017 at 1:32 pm

    " . But our problem is not called Donald Trump. And we need to stop pretending that it is. We are the problem. We allow our governments to tell our armies to bomb and drone innocent people while we watch cooking shows. We have believed, as long as we've been alive, whatever the media feed us, without any critical thought, which we reserve for choosing our next holiday destination." .

    Dear Raul,

    Yes, the media creates distortions in our perceptions. Yes, the orange one plays that terrain like a pro. Yes the British MP is hypocritical. I am with you there.

    "We are the problem." This kind of reasoning may be correct on a cosmic scale but it always seems to run to one of two conclusions. 1) Become a Buddhist and try to improve yourself. 2) Humans are too dumb to survive; wait until nature takes its course and humans kill themselves off playing Russian Roulette.

    I am not sure what your are recommending here. Do we let the orange sacred clown run this imperialist project into the ground? (To be replaced by what?) Or in opposing Trump do we clarify what we do want = i.e. a government that does not torture, a government that does not protect gotcha game mortgage lenders, a government that does not arm the world, a government that does not subsidize old suicidal fossil fuels, a government that is not run by a hysterical 3 AM tweeting 16 year old Marie Antoinette, your issue here .

    I don't know the answer here. The orange bull in the china shop is useful in so far as he reveals certain truths = ex: waterboarding is torture, congressmen are for sale, America has killed a lot of people, etc. If he stops the NeoCon project of invading other countries he might even be a benefit to world peace. But he's also likely to get people killed with his impulsive decisions and his ginning up the rubes.

    Irrational , February 9, 2017 at 2:42 pm

    Not reporting on tweets would free up a lot of time .

    Jeff N , February 9, 2017 at 5:12 pm

    a tomato is a fruit, but you can't use it in "fruit salad" :D

    Waking Up , February 9, 2017 at 5:52 pm

    What this really tells you is to what extent the political systems in the US and the UK, along with the media that serve them, have turned into a massive void, a vortex, a black hole from which any reflection, criticism or self-awareness can no longer escape. By endlessly and relentlessly pointing to someone, anyone, outside of their own circle of 'righteousness' and political correctness, they have all managed to implant one view of reality in their voters and viewers, while at the same time engaging in the very behavior they accuse the people of that they point to. For profit.

    On a recent interview with Donald Trump, Bill O'Reilly stated in regards to Vladimir Putin "But he's a killer". Donald Trump responds with a truth rarely heard in the media today, "There are a lot of killers. Do you think our country is so innocent?"

    I may not be a fan of Donald Trumps, but, how can we put down that level of honesty? Imagine if we actually had an honest nationwide discussion on what we are doing in the rest of the world .

    [Feb 09, 2017] How lies work

    Feb 09, 2017 | stumblingandmumbling.typepad.com

    Nick Cohen makes a good point : it is not congenital liars that should worry us, but congenital believers – those who fall for the lies of charlatans. We know that many do so: almost half of voters believed the lie that leaving the EU would allow us to spend an extra £350m a week on the NHS.

    This poses the question: why do people fall for lies? Here, we can learn from behavioural economics and research (pdf) into criminal fraud. I reckon there are several factors that liars exploit in politics.

    One is wishful thinking. People want to believe there's a simple solution to NHS underfunding (leave the EU!) or to low wages (cut immigration!) just as they want to believe they can get rich quick or make money by taking no risk: Ponzi schemers like Bernie Madoff play upon that last one. The wish is often the father to the belief.

    Relatedly, perhaps, there are lottery-type preferences. People like long-odds bets and pay too much for them: this is why they back longshots (pdf) too much and pay over the odds for speculative shares . To such people, the fact that an offer seems too good to be true is therefore, paradoxically, tempting. A study of fraud by the OFT found :

    Some people viewed responding to a scam as taking a long-odds gamble: they recognised that there was something wrong with the offer, but the size of the possible prize or reward (relative to the initial outlay) induced them to give it a try on the off-chance that it might be genuine.

    There's a particular type that is especially likely to take a long-odds bet: the desperate. Lonely people are vulnerable to the romance scam; gamblers who have lost take big bets to get even; losing teams try "hail Mary" tactics. In like fashion, people who feel like they have lost out in the era of globalization were tempted to vote for Trump and Brexit.

    There's another mechanism here: people are likely to turn to con-men if the alternatives have failed. Werner Troesken shows (pdf) how snake-oil sellers exploited this. They invested a lot in advertising and in product differentiation and so when other products failed they could claim that theirs would work when the others hadn't. I suspect that fund managers use a similar trick: the failure of many to beat the market leads investors simply to trust others rather than tracker funds. The fact that previous policies had failed working people thus encouraged them to try something different – be it Brexit or Trump.

    Yet another trick here is the affinity fraud. We tend to trust people like ourselves, or who at least who look like ourselves. Farage's endless posturing as a "man of the people" – fag and pint in hand, not caring about "political correctness" – laid the basis for people to trust him, just as Bernie Madoff joined all the right clubs to encourage wealthy (often Jewish) folk to trust him. By contrast, the claims from the Treasury and various think-tanks that Brexit would make us poorer came from metropolitan elites who were so different from poorer working class people that they weren't trusted. And in fact the very talk of "liberal elites" carried the subtext: "don't trust them: they're not like you".

    All of these tendencies have been reinforced by another – the fact that, as David Leiser and Zeev Kril have shown , people are bad at making connections in economics. The idea that Brexit would hurt us rested upon tricky connections: between the terms of Brexit and trade rules; from trade rules to actual trade; and from trade to productivity. By contrast, the idea that leaving the EU would save us money was simple and easy to believe.

    Now, I don't say all this merely to be a Remoaner; complaining about liars is like a fish complaining that the water is wet. Instead, I want to point out that it is not sufficient to blame the BBC for not calling out Brexiters' lies. Yes, the BBC disgraced itself during the plebiscite campaign. But we must also understand how voters fall for such mendacity. As Akerlof and Shiller write:

    Voters are phishable in two major ways. First, they are not fully informed; they are information phools. Second, voters are also psychological phools; for example, because they respond to appeals such as lawnmower ads [a candidate seen mowing his own lawn is regarded as a man of the people] ( Phishing for Phools , p 75)

    All this raises a challenge for liberals. Many used to believe the truth would win out over lies in the marketplace for ideas. This is no longer true, if it ever were. Instead, the questions now are: what can we do about this? And what should we do? The two questions might well have different answers. But we can make a start by understanding how lies are sometimes believed. Keith | February 07, 2017 at 04:47 PM

    The marketplace of ideas assumes that the consumers are able and willing to inform themselves and be rational rather than emotional. Clearly this is not true of a lot of voters when confronted by a manipulative press and Tories like Jim with their right wing agenda slyly hidden for the time being.

    Equally as in other areas such as health care shopping around is impossible to do as the consumers lack expert knowledge. Allowing the profit motive to apply to many areas is sure to be a disaster for human welfare as the profit incentive stops the experts using their knowledge for good. Finance is a classic example of the uninformed being repeatedly duped into unsound investments decade after decade. Benjamin Graham describes how in his first job selling Bonds to grannies he came to realise that he was being asked to steal the life savings of pensioners via commissions designed to get a sale of junk paper. Which is why he moved elsewhere to a more ethical line of work. But I am sure leaving the biggest most integrated market in the world where lots of foreigners have helpfully learned our language will surely increase our prosperity....Nigel says so.

    Matthew Moore | February 07, 2017 at 05:37 PM
    There will always be gullible people (/ people constrained by high opportunity cost of information search, as I prefer to think of them)

    And there will always be liars looking to take advantage of them. Like 99% of politicians ever.

    It's very Marxist to wonder how we might change this basic fact of humanity, when the real solution is clear. Don't set up powerful central institutions that rely on coercion: it attracts liars, rewards them, and makes new liars out of honest people.

    Dipper | February 07, 2017 at 07:47 PM
    Oh, we Leavers are being lectured again by our Remainer betters on our stupidity.

    If the statements of the amount we pay to the EU were lies, how come we owe them €50 billion?

    how come no-one ever asks why we have to implement the four freedoms when Germany gets a free pass on the Free market in Services?

    the government announced house building plans today, and no-one asks whether a cause of high house prices and a housing shortage is too much immigration?

    It's not the lies, it's the questions never asked that stand out.

    Dipper | February 07, 2017 at 08:09 PM
    @ Keith - "Tories like Jim"

    I don't read Jim as a Tory. I read him as someone who was a Labour supporter but now just stares in amazement at a group of people who have become EU Federalist fanatics spouting delusional slogans who can never answer a straight question and refuse to acknowledge the obvious problems of democratic accountability.

    How on earth did that happen? How did apparently intelligent people completely lose their critical faculties and join a quasi-religious cult that chants empty slogans and denounces anyone who questions them?

    But I'm sure Jim can speak for himself.

    Ralph Musgrave | February 07, 2017 at 09:45 PM
    Chris missed out the fact that people tend to give others the benefit of the doubt. I.e. if X tells a monster lie, peoples' immediate reaction is: "X is is a bastard". But then on second thoughts they feel ashamed at accusing someone else of being a bastard, and assume it's they themselves that must be wrong.

    Sotto Voce | February 07, 2017 at 10:45 PM
    There is a bit of a danger here of another comment thread being derailed with Brexit mud-slinging. Chris's post isn't really about the pros and cons of Brexit, it just offers a vivid example of the phenomenon under discussion.

    The point Chris makes in the last paragraph is more general and profound. If any and all data/information/evidence/argument is interpreted in partisan fashion and subject to massive confirmation bias so that debates increasingly polarise - or if different sides in debates proffer their own favoured but incompatible versions of the truth - then meaningful dialogue, deliberation and compromise become near impossible. All we get is intolerance, mistrust and greater partisanship. Clearly these are not entirely new issues, but it seems undeniable that there has been a qualitative shift in 'quality' of public debate.

    We appear to be witnessing the US political system at great risk of imploding, as enlightenment values are abandoned and key tenets of liberal democratic practice are wilfully rejected. This is the route to chaos.

    The questions Chris poses are, to my mind at least, the right ones. The very nature of the problem means that the old/favoured remedies are unlikely to be effective. But what can replace them? Is a violent conflagration the only way of shocking the system out of hyper-partisanship and the rejection of the foundational belief that we live in a shared reality (i.e. for people to 'come to their senses')? Or can we back out of this particular cul-de-sac peacefully? You've got to hope so. But, if so, how?

    e | February 07, 2017 at 10:57 PM
    Our upper echelon, i.e. our long-standing middle of the road Labour MPs and commentators, have long been successful in fighting off calls for left leaning policy/talk of how things work (because who knows where this will end) under a guise of fighting off racism/ a closed shop mentality; the routes of least resistance 50s – 00s which should alert us to the ability of the English working class to embrace immigration and avoid base philosophies. But it seems not. Seems to me our shared interest beyond race creed colour and gender continues to be deliberately and systematically no-platformed. What I fail to understand, given the rise of UKIP, is why this is not glaringly obvious; because if you're one of the majority who live life as best you might with as much consideration and tolerance as you can muster where does credence go when an ordinary workers tendency to sound 'populist' is marked up to racism no matter known history...

    aragon | February 07, 2017 at 11:53 PM
    Not again!
    Phishing for Phools. The Political Brain...

    http://www.nytimes.com/2007/08/26/books/review/Brooks-t.html

    "Serious thinkers set to work, and produced a long shelf of books answering this question. Their answers tended to rely on similar themes. First, Democrats lose because they are too intelligent. Their arguments are too complicated for American voters. Second, Democrats lose because they are too tolerant. They refuse to cater to racism and hatred. Finally, Democrats lose because they are not good at the dark art of politics. Republicans, though they are knuckle-dragging simpletons when it comes to policy, are devilishly clever when it comes to electioneering. They have brilliant political consultants like Lee Atwater and Karl Rove, who frame issues so fiendishly, they can fool the American people into voting against their own best interests."

    And immigration is about economics. This is Sweden an immigration superpower.

    http://www.express.co.uk/news/world/755997/Sweden-Malmo-military-intervention-no-go-zone-crime-surge

    "Swedish police last year issued a report where it detailed incidents from more than 55 areas which it branded as "no-go zones" as it detailed brutal attacks on police, sexual assaults, children carrying weapons and general turmoil sweeping across the country."

    http://www.independent.co.uk/news/world/europe/most-europeans-want-muslim-ban-immigration-control-middle-east-countries-syria-iran-iraq-poll-a7567301.html

    "A ban was supported by 71 per cent of people in Poland, 65 per cent in Austria, 53 per cent in Germany and 51 per cent in Italy.
    In the UK, 47 per cent supported a ban.
    In no country did more than 32 per cent disagree with a ban."

    aragon | February 08, 2017 at 12:29 AM
    Phishing for Phools

    "It thereby explains a paradox: why, at a time when we are better off than ever before in history, all too many of us are leading lives of quiet desperation."

    http://nfs.sparknotes.com/macbeth/page_162.html

    "Pour the sweet milk of concord into hell,
    Uproar the universal peace, confound
    All unity on earth."

    Human Nature has not changed.

    Guano | February 08, 2017 at 12:42 AM
    The truth is complicated.

    The truth is challenging.

    Tony Holmes | February 08, 2017 at 09:13 AM
    Chris, a bit off the point, but if everyone followed your advice and put money in tracker funds and active funds disappeared, what would happen to the stock market ? Instinct tells me it would become extremely volatile, but instinct is a bad guide...

    gastro george | February 08, 2017 at 09:35 AM
    FFS aragon, that "report" from Sweden is from the Express quoting directly a Swedish fascist.

    reason | February 08, 2017 at 11:29 AM
    Isn't the key point here prospect theory (I've just finished reading Kahneman). People with no good options gamble.

    reason | February 08, 2017 at 11:30 AM
    P.S. The no good options bit is a very good reason for opposing first past the post and the limited options consequence.

    aragon | February 08, 2017 at 11:47 AM
    gasto george

    It is not an extreme story, I don't speak Swedish or have any contact with Sweden. I only read the main stream media which includes the Daily Express.

    As you would expect most of the media does not report on Sweden, unless it has a British angle.
    e.g. Birmingham Boy killed by a hand grenade.
    (I don't know how you can spin Hand Grenade)

    The report originates with the Swedish Police the situation in Malmo is serious and individual police officers like Peter Springare's Facebook post.

    Here is a report from the thelocal.se
    http://www.thelocal.se/20170127/malmo-police-chief-help-us

    "After a wave of violence in Sweden's third city, police boss Stefan Sintéus has appealed to residents in Malmö: "Help us. Help us to tackle the problems. Cooperate with us.""

    Dipper | February 08, 2017 at 12:03 PM
    @ gastro george

    This isn't the first time facists have made inflammatory comments about muslims. Nick Griffin did this and was prosecuted for inciting racial hatred in 2006. The summary of what he said is some way down this article.

    http://www.independent.co.uk/news/uk/crime/tougher-race-laws-likely-after-bnp-pair-cleared-423820.html

    Eleven years later we have this http://www.bbc.co.uk/news/uk-england-south-yorkshire-38845332

    And that, in a nutshell, is the problem with banning "fake news". You have to be really open, transparent and clear and be absolutely sure you are right, otherwise you end up making heroes of facists and stoking the notion that its all a plot to hide the truth from the people. And that is a really bad outcome.

    MPs wrestling with their consciences, loud debates, arguments about the truth ... this is the sound of a properly functioning parliamentary democracy and long may that noise continue.

    Guano | February 08, 2017 at 02:06 PM
    The first two words of the article: Nick Cohen.

    Nick Cohen does make some good points but he himself has a complicated relationship with the truth in some areas. When he isn't talking about congenital liars and congenital believers, he continues to get into a rage about people who opposed the invasion of Iraq. As far as I can see, the invasion of Iraq has been the disaster that some of us feared (because regime change involves putting in place a new regime change, which is very difficult and for which the USA and UK do not have the skills). And, as far as I can see, some of the assumptions made by Nick Cohen in 2002 and 2003 in supporting the invasion (such as the ability of the Iraqi National Congress to create a new regime) were very dubious and their weakness of these assumptions is why the invasion was a failure and has had created an array of other problems.

    In his campaign to avoid a post-truth future, Nick Cohen claims that people like him "are on their own" and he explicitly rejects working with the kind of people who opposed the invasion of Iraq. That's a pity, really, because many people appear to have started their opposition to the invasion because the information provided and the logic used appeared to be dodgy. The period from August 2002 to March 2003 prefigured the Trump/Brexit era for post-truth information and arguments. Nick Cohen would be on stronger ground if he admitted that the invasion of Iraq has not necessarily worked to anyone's advantage.

    I guess that what is going on in Nick Cohen's mind (and I can only guess) is that he has built up a negative image of the type of person who opposed the invasion of Iraq and he has difficulty getting past that image and come to terms with what those people were saying and what has actually happened in Iraq. Thus in between writing articles about the need for truth, Nick Cohen writes expressions of outrage about opponents of the invasion of Iraq as if they had been found to be wrong.

    It seems to be a very extreme example of seeing the messenger and not the message, which is one of the issues with failing to recognise lies.

    gastro george | February 08, 2017 at 02:24 PM
    @aragon

    OK, well I've worked most of my life with Swedes and Norwegians, and have regularly visited Malmo three or four times a year recently, although the last was a bit over a year ago.

    So, yes, immigration is an issue, and the Sweden Democrats (fascists) have been rising in the polls. Malmo itself has some problems in the suburbs.

    But there are no no-go areas. Armed violence has more traditionally been associated with biker-gang turf-related drug wars - otherwise with the far right (see Breivik in Norway) and then, as your last link discusses, lone serial killers.

    Reading anything the Sweden Democrats have to say is the equivalent of believing Wilders in the Netherlands - they are loons.

    Barbara Konstant | February 08, 2017 at 05:36 PM
    Despairing as it seems, our humanity has not reached the necessary level of awareness needed to function peacefully in our world.

    [Feb 08, 2017] The stunning collapse of the Soviet empire in 1989-91 has often been heralded in the West as a triumph of capitalism and democracy, as though this eventwere obviously a direct result of the policies of the Reagan and Thatcher governments. This self-congratulatory analysis has little relation to measurable facts, circumstances, and internal political dynamics that were the real historical causes of the deterioration of the Soviet empire and ultimately the Soviet state itself

    Notable quotes:
    "... Around 1975, the Soviet Union entered a period of economic stagnation from which it would never emerge. Increasingly, the USSR looked to Europe, primarily West Germany, to provide hard currency financing through massive loans, while the U.S. became a major supplier of grain.[1] Despite moments of anti-Communist grandstanding, the Americans and Western Europeans maintained trade relations with the cash-strapped Soviet Union, which dipped into its Stalin-era gold reserves to increase availability of consumer goods . ..."
    "... Soviet living standards remained poor by Western standards. By 1980, only 9 percent of Soviets had automobiles, which was actually a vast improvement under Brezhnev. Very little was computerized, due to state paranoia about the use of telecommunications for counterrevolutionary purposes. The USSR was able to endure this technological lag because its closed economy protected it from competition, but its ability to maintain military superiority increasingly depended on the ability to keep pace with Western modernization. ..."
    "... It did not need a foreign enemy to "defeat" it, for it was deteriorating from within. ..."
    "... In the Great Game of "chicken," in which we all are mostly passengers in the speeding cars with loony drivers ya-hooing out the windows, I recall the Soviets were the ones to veer off from that head-on collision that might have ended it all earlier than it seems increasingly likely to end anyway. And Russian leadership seems more concerned about the survival of the nation than our own clown-car leadership. ..."
    "... And patently the military-security monkey that's riding our backs is doing a p!ss-poor job of "defending us" in any ordinary sense of the term, and not even a vary good job of playing Imperial Forces. Though of course the net effects of military and political chaos-building and destabilization do blast out a nice open-pit mine for corporate looters to get at the extractables.. ..."
    Feb 08, 2017 | www.nakedcapitalism.com

    February 7, 2017 at 12:22 pm

    An over extended Soviet Empire collapsed in no small part due to its obsession with winning a war, albeit one that thankfully remained 'cold', that it never could.

    A corrupt, nepotistic distant, paranoid elite that instead of dividing its efforts into looking after its own society's well-being, as well a apparently just defending it, opted for near as dammed bankrupting itself attempting to feed an insatiable military machine it could ill afford (and would mostly never use) at its increasingly disaffected, divided, restive people's expense.

    Mind you, they were just dumb Commies.

    JTMcPhee, February 7, 2017 at 3:25 pm

    First, did the Soviet state "bankrupt itself damm near" mostly by trying to feed an "insatiable military machine," or did the wealth of the Soviets get dissipated into other ratholes as well, alongside various external pressures and effects? And what scale applied to each political-decision "allocation"? One view, among a flood of intersecting and competing interpretations, of course:

    The stunning collapse of the Soviet empire in 1989-91 has often been heralded in the West as a triumph of capitalism and democracy, as though this event were obviously a direct result of the policies of the Reagan and Thatcher governments. This self-congratulatory analysis has little relation to measurable facts, circumstances, and internal political dynamics that were the real historical causes of the deterioration of the Soviet empire and ultimately the Soviet state itself. Fiery political speeches and tough diplomatic postures make good theater, but they are ineffective at forcing political transformation in totalitarian nations, as is proven by the persistence of far less powerful Communist regimes in Cuba and east Asia in the face of punishing trade embargos. The key to understanding the reasons for the demise of the Soviet Union is to be found not in the speeches or policies of Western politicians, but in internal Soviet history.

    1. Stagnation in the 1970s

    The Soviet Union was already in decline as a world power well before 1980. Any illusions of global Communist hegemony had evaporated with the collapse of Sino-Soviet relations in the 1960s. As the Nixon administration improved American relations with an increasingly independent China, the Soviets saw a strategic need to scale down the nuclear arms race, which placed enormous strains on its faltering economy. The threat of a nuclear confrontation was reduced considerably by the anti-ballistic missile (ABM) and strategic arms limitation treaties (SALT) contracted with the Nixon administration in 1972. This détente, or easing of tensions, allowed Leonid Brezhnev to focus on domestic economic and social development, while boosting his political popularity.

    Around 1975, the Soviet Union entered a period of economic stagnation from which it would never emerge. Increasingly, the USSR looked to Europe, primarily West Germany, to provide hard currency financing through massive loans, while the U.S. became a major supplier of grain.[1] Despite moments of anti-Communist grandstanding, the Americans and Western Europeans maintained trade relations with the cash-strapped Soviet Union, which dipped into its Stalin-era gold reserves to increase availability of consumer goods .

    Foreign trade and mild economic reforms were not enough to overcome the inefficiencies of the Soviet command economy, which remained technologically backward and full of corruption. Economic planners were frequently unable to diagnose and remedy problems, since they were given false reports by officials who only pretended to be productive.

    Soviet living standards remained poor by Western standards. By 1980, only 9 percent of Soviets had automobiles, which was actually a vast improvement under Brezhnev. Very little was computerized, due to state paranoia about the use of telecommunications for counterrevolutionary purposes. The USSR was able to endure this technological lag because its closed economy protected it from competition, but its ability to maintain military superiority increasingly depended on the ability to keep pace with Western modernization.

    In his radio broadcasts during the late 1970s, Ronald Reagan complained that the capitalist nations propped up the intrinsically flawed Soviet regime, instead of allowing it to naturally collapse from its own inefficiency and inhumanity.[2] In contrast to his later hagiographers, Reagan did not envision defeating the Soviet Union by forceful action, but instead he perceived that the regime would collapse from its own failings once the West removed its financial life support system. It is this early Reagan, far more thoughtful than he is generally credited, who proved to be most astute in diagnosing the state of the USSR. It did not need a foreign enemy to "defeat" it, for it was deteriorating from within.
    http://www.arcaneknowledge.org/histpoli/soviet.htm

    And I recall the Soviet military leadership was largely (no, not exclusively of course, humans being what they are) reacting to the clear and present danger that "the West" presented. Among many other considerations, of course. In the Great Game of "chicken," in which we all are mostly passengers in the speeding cars with loony drivers ya-hooing out the windows, I recall the Soviets were the ones to veer off from that head-on collision that might have ended it all earlier than it seems increasingly likely to end anyway. And Russian leadership seems more concerned about the survival of the nation than our own clown-car leadership.

    Seems to me that all of us ordinary people, many of whom would gladly take advantage of opportunities to do some looting themselves, to "get ahead" in the "rat race," if only those opportunities were presented, have insufficient collective concern about the many systems, living and political-economy, that apparently are collapsing or running out of control. And patently the military-security monkey that's riding our backs is doing a p!ss-poor job of "defending us" in any ordinary sense of the term, and not even a vary good job of playing Imperial Forces. Though of course the net effects of military and political chaos-building and destabilization do blast out a nice open-pit mine for corporate looters to get at the extractables..

    But yeah, the halls of history are full of echoes and shadows and reflections in a glass darkly And I wonder if London bookies are running a line on when history, as recorded and debated and acted out by humans, will REALLY end, thanks to our wonderful unbridled inventiveness and lack of that genetic predisposition to survive as a species that ants and termites and rats and cats and other "lesser creatures" seem to have

    Anon , February 7, 2017 at 12:50 pm

    Commies? That last paragraph sounds like post-WWII history in the US.

    Gman , February 7, 2017 at 2:13 pm

    ;-)

    [Feb 08, 2017] How Universities Are Increasingly Choosing Capitalism Over Education naked capitalism

    Notable quotes:
    "... By Henry Heller, a professor of history at the University of Manitoba, Canada and the author of The Capitalist University. Cross posted from Alternet ..."
    "... The following is an excerpt from the new book ..."
    "... by Henry Heller (Pluto Press, December 2016): ..."
    "... Inside Higher Education ..."
    "... The University, State and Market: The Political Economy of Globalization in the Americas ..."
    "... New Left Review ..."
    "... The Field of Cultural Production: Essays on Art and Literature ..."
    "... Letters from the Deutsch-Französische Jahrbücher ..."
    "... Anti-Communism in Twentieth-Century America ..."
    "... Marxism is still regarded with suspicion in the United States. ..."
    "... As if on cue, sociology, psychology, literature, political science, and anthropology all took sides by explicitly rejecting Marxism and putting forward viewpoints opposed to it. History itself stressed American exceptionalism, justified U.S. expansionism, minimized class conflict, and warned against revolution. ..."
    Feb 08, 2017 | www.nakedcapitalism.com
    How Universities Are Increasingly Choosing Capitalism Over Education Posted on February 7, 2017 by Yves Smith Yves here. Some further observations. First, the author neglects to mention the role of MBAs in the reorientation of higher education institutions. When I went to school, the administrative layer of universities was lean and not all that well paid. Those roles were typically inhabited by alumni who enjoyed the prestige and being able to hang around the campus. But t he growth of MBAs has meant they've all had to find jobs, and colonizing not-for-profits like universities has helped keep them off the street.

    Second, this post focuses on non-elite universities, but the same general pattern is in play, although the specific outcomes are different. Universities with large endowments are increasingly hedge funds with an educational unit attached.

    By Henry Heller, a professor of history at the University of Manitoba, Canada and the author of The Capitalist University. Cross posted from Alternet

    The following is an excerpt from the new book The Capitalist University: The Transformations of Higher Education in the United States since 1945 by Henry Heller (Pluto Press, December 2016):

    The fact that today there are over 4,000 colleges and universities in the United States represents an unparalleled educational, scientific, and cultural endowment. These institutions occupy a central place in American economic and cultural life. Certification from one of them is critical to the career hopes of most young people in the United States. The research produced in these establishments is likewise crucial to the economic and political future of the American state. Institutions of higher learning are of course of varying quality, with only 600 offering master's degrees and only 260 classified as research institutions. Of these only 87 account for the majority of the 56,000 doctoral degrees granted annually. Moreover, the number of really top-notch institutions based on the quality of their faculty and the size of their endowments is no more than 20 or 30. But still, the existence of thousands of universities and colleges offering humanistic, scientific, and vocational education, to say nothing of religious training, represents a considerable achievement. Moreover, the breakthroughs in research that have taken place during the last two generations in the humanities and social sciences, not to speak of the natural sciences, have been spectacular.

    But the future of these institutions is today imperiled. Except for a relatively few well-endowed universities, most are in serious financial difficulty. A notable reason for this has been the decline in public financial support for higher education since the 1980s, a decline due to a crisis in federal and state finances but also to the triumph of right-wing politics based on continuing austerity toward public institutions. The response of most colleges and universities has been to dramatically increase tuition fees, forcing students to take on heavy debt and putting into question access to higher education for young people from low- and middle-income families. This situation casts a shadow on the implicit post-war contract between families and the state which promised upward mobility for their children based on higher education. This impasse is but part of the general predicament of the majority of the American population, which has seen its income fall and its employment opportunities shrink since the Reagan era. These problems have intensified since the financial collapse of 2008 and the onset of depression or the start of a generalized capitalist crisis.

    Mounting student debt and fading job prospects are reflected in stagnating enrollments in higher education, intensifying the financial difficulties of universities and indeed exacerbating the overall economic malaise.[1] The growing cost of universities has led recently to the emergence of Massive Online Open Courses whose upfront costs to students are nil, which further puts into doubt the future of traditional colleges and universities. These so-called MOOCs, delivered via the internet, hold out the possibility, or embody the threat, of doing away with much of the expensive labor and fixed capital costs embodied in existing university campuses. Clearly the future of higher education hangs in the balance with important implications for both American politics and economic life.

    The deteriorating situation of the universities has its own internal logic as well. In response to the decline in funding, but also to the prevalence of neoliberal ideology, universities-or rather the presidents, administrators, and boards of trustees who control them-are increasingly moving away from their ostensible mission of serving the public good to that of becoming as far as possible like private enterprises. In doing so, most of the teachers in these universities are being reduced to the status of wage labor, and indeed precarious wage labor. The wages of the non-tenured faculty who now constitute the majority of teachers in higher education are low, they have no job security and receive few benefits. Although salaried and historically enjoying a certain autonomy, tenured faculty are losing the vestiges of their independence as well. Similarly, the influence of students in university affairs-a result of concessions made by administrators during the upheavals of the 1960s and 1970s-has effectively been neutered. These changes reflect a decisive shift of power toward university managers whose numbers and remuneration have expanded prodigiously. The objective of these bureaucrats is to transform universities as much as possible to approximate private and profit-making corporations, regarded as models of efficient organization based on the discipline of the market. Indeed, scores of universities, Phoenix University for example, have been created explicitly as for-profit businesses and currently enroll millions of students.

    Modern universities have always had a close relationship with private business, but whereas in the past faculty labor served capital by producing educated managers, highly skilled workers, and new knowledge as a largely free good, strenuous efforts are now underway to transform academic employment into directly productive, i.e., profitable, labor. The knowledge engendered by academic work is accordingly being privatized as a commodity through patenting, licensing, and copyrighting to the immediate benefit of universities and the private businesses to which universities are increasingly linked. Meanwhile, through the imposition of administrative standards laid down in accord with neoliberal principles, faculty are being subjected to unprecedented scrutiny through continuous quantified evaluation of teaching and research in which the ability to generate outside funding has become the ultimate measure of scholarly worth. At the same time, universities have become part of global ranking systems like the Shanghai Index or the Times Higher Education World University Rankings in which their standing in the hierarchy has become all important to their prestige and funding.

    Several intertwined questions emerge from this state of affairs. In the first place, given the rising expense and debt that attendance at university imposes and declining employment prospects especially for young people, will there continue to be a mass market for higher education? Is the model of the university or college traditionally centered on the humanities and the sciences with a commitment to the pursuit of truth compatible with the movement toward converting the universities into quasi- or fully private business corporations? Finally, what are the implications of changes in the neoliberal direction for the future production of objective knowledge, not to speak of critical understanding?

    Universities during the Cold War produced an impressive amount of new positive knowledge, not only in the sciences, engineering, and agriculture but also in the social sciences and humanities. In the case of the humanities and social sciences such knowledge, however real, was largely instrumental or tainted by ideological rationalizations. It was not sufficiently critical in the sense of getting to the root of the matter, especially on questions of social class or on the motives of American foreign policy. Too much of it was used to control and manipulate ordinary people within and without the United States in behalf of the American state and the maintenance of the capitalist order. There were scholars who continued to search for critical understanding even at the height of the Cold War, but they largely labored in obscurity. This state of affairs was disrupted in the 1960s with the sudden burgeoning of Marxist scholarship made possible by the upsurge of campus radicalism attendant on the anti-war, civil rights, and black liberation struggles. But the decline of radicalism in the 1970s saw the onset of postmodernism, neoliberalism, and the cultural turn. Postmodernism represented an unwarranted and untenable skepticism, while neoliberal economics was a crude and overstated scientism. The cultural turn deserves more respect, but whatever intellectual interest there may be in it there is little doubt that the net effect of all three was to delink the humanities and social sciences from the revolutionary politics that marked the 1960s. The ongoing presence in many universities of radicals who took refuge in academe under Nixon and Reagan ensured the survival of Marxist ideas if only in an academic guise. Be that as it may, the crisis in American society and the concomitant crisis of the universities has become extremely grave over the last decade. It is a central contention of this work that, as a result of the crisis, universities will likely prove to be a key location for ideological and class struggle, signaled already by the growing interest in unionization of faculty both tenured and non-tenured, the revival of Marxist scholarship, the Occupy Movement, the growing importance of the Boycott, Divestment, and Sanctions movement, and heightening conflicts over academic freedom and the corporatization of university governance.

    The approach of this work is to examine the recent history of American universities from the perspective of Marxism, a method which can be used to study these institutions critically as part of the capitalist economic and political system. Despite ongoing apologetics that view universities as sites for the pursuit of disinterested truth, we contend that a critical perspective involving an understanding of universities as institutions based on the contradictions of class inequality, the ultimate unity of the disciplines rooted in the master narrative of historical materialism, and a consciousness of history makes more sense as a method of analysis. All the more so, this mode of investigation is justified by the increasing and explicit promotion of academic capitalism by university managers trying to turn universities into for-profit corporations. In response to these policies scholars have in fact begun to move toward the reintegration of political economy with the study of higher education. This represents a turn away from the previous dominance in this field of postmodernism and cultural studies and, indeed, represents a break from the hegemonic outlook of neoliberalism.[2] On the other hand, most of this new scholarship is orientated toward studying the effects of neoliberalism on the contemporary university, whereas the present work takes a longer view. Marxist political economy demands a historical perspective in which the present condition of universities emerged from the crystallization of certain previous trends. It therefore looks at the evolution of the university from the beginning of the twentieth century, sketching its evolution from a preserve of the upper-middle class in which research played almost no role into a site of mass education and burgeoning research, and, by the 1960s, a vital element in the political economy of the United States.

    In contrast to their original commitment to independence with respect to the state up to World War II, most if by no means all universities and colleges defined their post-war goals in terms of the pursuit of the public good and were partially absorbed into the state apparatus by becoming financially dependent on government. But from start to finish twentieth-century higher education also had an intimate and ongoing relationship with private business. In the neoliberal period universities are taking this a step further, aspiring to turn themselves into quasi- or actual business corporations. But this represents the conclusion of a long-evolving process. The encroachment of private business into the university is in fact but part of the penetration of the state by private enterprise and the partial privatization of the state. On the surface this invasion of the public sphere by the market may appear beneficial to private business. We regard it, on the contrary, as a symptom of economic weakness and a weakening of civil society.

    The American system of higher education, with its prestigious private institutions, great public universities, private colleges and junior colleges, was a major achievement of a triumphant American republic. It provided the U.S. state with the intellectual, scientific, and technical means to strengthen significantly its post-1945 power. The current neoliberal phase reflects an America struggling economically and politically to adapt to the growing challenges to its global dominance and to the crisis of capitalism itself. The shift of universities toward the private corporate model is part of this struggle. Capitalism in its strongest periods not only separated the state from the private sector, it kept the private sector at arm's length from the state. The role of the state in ensuring a level playing field and providing support for the market was clearly understood. The current attempt by universities to mimic the private sector is a form of economic and ideological desperation on the part of short-sighted and opportunistic university administrators as well as politicians and businessmen. In our view, this aping of the private sector is misguided, full of contradictions, and ultimately vain if not disastrous. Indeed, it is a symptom of crisis and decline.

    The current overwhelming influence of private business on universities grew out of pre-existing tendencies. There is already an existing corporate nature of university governance both private and public, as well as an influence of business on universities in the first part of the twentieth century. In reaction there developed the concept of academic freedom as well as the establishment of the system of tenure and the development of a rather timid faculty trade unionism. This underscores the importance of private foundations in controlling the development of the curriculum and research in both the sciences and humanities. In their teaching, universities were mainly purveyors of the dominant capitalist ideology. Humanities and social science professors imparted mainly liberal ideology and taught laissez-faire economics which justified the political and economic status quo. The development of specialized departments reinforced the fragmentation of knowledge and discouraged the emergence of a systemic overview and critique of American culture and society. There were, as noted earlier, a few Marxist scholars, some of considerable distinction, who became prominent particularly in the wake of the Depression, the development of the influence of the Communist Party, and the brief period of Soviet-American cooperation during World War II. But the teaching of Marxism was frowned upon and attacked even prior to the Cold War.

    The post-1945 university was a creation of the Cold War. Its expansion, which sprang directly out of war, was based on the idea of education as a vehicle of social mobility, which was seen as an alternative to the equality and democracy promoted by the populism of the New Deal. Its elitist and technocratic style of governance was patterned after that of the large private corporation and the American federal state during the 1950s. Its enormously successful research programs were mainly underwritten by appropriations from the military and the CIA. The CIA itself was largely created by recruiting patriotic faculty from the universities. Much of the research in the social sciences was directed at fighting Soviet and revolutionary influence and advancing American imperialism abroad. Marxist professors and teaching programs were purged from the campuses.

    Dating from medieval times, the curriculum of the universities was based on a common set of subjects including language, philosophy, and natural science premised on the idea of a unitary truth. Although the subject matter changed over the centuries higher education continued to impart the hegemonic ideology of the times. Of course the notion of unitary truth was fraying at the seams by the beginning of the twentieth century with the development of departmental specialization and the increasingly contested nature of truth, especially in the social sciences in the face of growing class struggle in America. However, the notion of the idea of the unity of knowledge as purveyed by the university was still ideologically important as a rationale for the existence of universities. Moreover, as we shall demonstrate, it was remarkable how similarly, despite differences in subject matter and method, the main disciplines in the humanities and social sciences responded to the challenge of Marxism during the Cold War. They all developed paradigms which opposed or offered alternatives to Marxism while rationalizing continued loyalty to liberalism and capitalism. As if on cue, sociology, psychology, literature, political science, and anthropology all took sides by explicitly rejecting Marxism and putting forward viewpoints opposed to it. History itself stressed American exceptionalism, justified U.S. expansionism, minimized class conflict, and warned against revolution. Indeed, this work will focus on these disciplines because they defended the capitalist status quo at a deeper cultural and intellectual level than the ubiquitous mass media. As Louis Althusser pointed out, the teaching received by students from professors at universities was the strategic focal point for the ideological defense of the dominant class system. That was as true of the United States as it was of France, where institutions of higher learning trained those who would later train or manage labor. Criticizing the recent history of these disciplines is thus an indispensable step to developing an alternative knowledge and indeed culture that will help to undermine liberal capitalist hegemony.[3]

    The approach of this work is to critically analyze these core academic subjects from a perspective informed by Pierre Bourdieu and Karl Marx. Bourdieu points out that the deep involvement of the social sciences (and the humanities) with powerful social interests makes it difficult to free their study from ideological presuppositions and thereby achieve a truly socially and psychologically reflexive understanding.[4] But such reflexive knowledge was precisely what Marx had in mind more than a century earlier. Leaving a Germany still under the thrall of feudalism and absolutism for Paris in 1843, the young Marx wrote to his friend Arnold Ruge that

    reason has always existed, but not always in a reasonable form but, if constructing the future and settling everything for all times are not our affair, it is all the more clear what we have to accomplish at present: I am referring to ruthless criticism of all that exists, ruthless both in the sense of not being afraid of the results it arrives at and in the sense of being just as little afraid of conflict with the powers that be.[5]

    His task as he saw it was to criticize the existing body of knowledge so as to make it as reasonable as possible, i.e., to undermine its illusory and ideological character and substitute knowledge which was both true and helped advance communism. Such a project entailed deconstructing the existing body of knowledge through rational criticism, exposing its ideological foundations and advancing an alternative based on a sense of contradiction, social totality, and a historical and materialist understanding. It is our ambition in surveying and studying the humanities and social sciences in the period after 1945 to pursue our investigation in the same spirit. Indeed, it is our view that a self-reflexive approach to contemporary knowledge, while woefully lacking, is an indispensable complement to the development of a serious ideological critique of the crisis-ridden capitalist society of today.

    Marxism is still regarded with suspicion in the United States. As a matter of fact, anti-Marxism in American universities was not merely a defensive response to McCarthyism as some allege. Anti-communism was bred in the bone of many Americans and was one of the strongest forces that affected U.S. society in the twentieth century, including the faculty members of its universities. An idée fixe rather than an articulated ideology, it was compounded out of deeply embedded albeit parochial notions of Americanism, American exceptionalism and anti-radicalism.[6] The latter was rooted in the bitter resistance of the still large American middle or capitalist class to the industrial unrest which marked the late nineteenth and early twentieth centuries and which had a strong bed of support among the immigrant working class. Nativism then was an important tool in the hands of this class in fighting a militant if ethnically divided working class. Moreover, the anti-intellectual prejudices of American society in general and the provincialism of its universities were ideal terrain for fending off subversive ideas from abroad like Marxism. Later, this anti-communism and hostility to Marxism became the rationale for the extension of American imperialism overseas particularly after 1945. The social origins of the professoriate among the lower middle class, furthermore, and its role as indentured if indirect servants of capital, strengthened its position as inimical to Marxism. Just as careers could be lost for favoring Marxism, smart and adroit academics could make careers by advancing some new intellectual angle in the fight against Marxism. And this was not merely a passing feature of the height of the Cold War: from the 1980s onward, postmodernism, identity politics, and the cultural turn were invoked to disarm the revolutionary Marxist politics that had developed in the 1960s. Whatever possible role identity politics and culture might have in deepening an understanding of class their immediate effect was to undermine a sense of class and strengthen a sense of liberal social inclusiveness while stressing the cultural obstacles to the development of revolutionary class consciousness.

    This overall picture of conformity and repression was, however, offset by the remarkable upsurge of student radicalism that marked the 1960s, challenging the intellectual and social orthodoxies of the Cold War. In reaction to racism and political and social repression at home and the Vietnam War abroad, students rebelled against the oppressive character of university governance and by extension the power structure of American society. Overwhelmingly the ideology through which this revolt was refracted was the foreign and until then largely un-American doctrine of Marxism. Imported into the universities largely by students, Marxism then inspired a new generation of radical and groundbreaking scholarship. Meanwhile it is important to note that the student revolt itself was largely initiated by the southern civil rights movement, an important bastion of which were the historically black colleges of the South. It was from the struggle of racially oppressed black students in the American South as well as the growing understanding of the anti-colonial revolutionaries of Vietnam that the protest movement in American colleges and universities was born. Equally important was the Free Speech Movement at Berkeley. Indeed, it is the contention of this work that the issues raised at Berkeley over democracy in the universities and the free expression of ideas not only shaped the student movement of that time but are still with us, and indeed are central to the future of universities and intellectual life today.

    At the heart of the Berkeley protest lay a rejection of the idea of a university as a hierarchical corporation producing exchange values including the production of trained workers and ideas convertible into commodities. Instead the students asserted the vision of a democratic university which produced knowledge as a use value serving the common good. It is our view that this issue raised at Berkeley in the 1960s anticipated the class conflict that is increasingly coming to the fore over so-called knowledge capitalism. Both within the increasingly corporate neoliberal university and in business at large, the role of knowledge and knowledge workers is becoming a key point of class struggle. This is especially true on university campuses where the proletarianization of both teaching and research staff is in process and where the imposition of neoliberal work rules is increasingly experienced as tyrannical. The skilled work of these knowledge producers, the necessarily interconnected nature of their work, and the fundamentally contradictory notion of trying to privatize and commodify knowledge, have the potential to develop into a fundamental challenge to capitalism.

    Notes:

    1. Paul Fain, "'Nearing the Bottom': Inside Higher Education," Inside Higher Education , May 15, 2014.

    2. Raymond A. Morrow, "Critical Theory and Higher Education: Political Economy and the Cul-de-Sac of the Postmodernist Turn," in The University, State and Market: The Political Economy of Globalization in the Americas , ed. Robert A. Rhoads and Carlos Alberto Torres, Stanford: Stanford University Press, 2006, pp. xvii‒xxxiii.

    3. Perry Anderson, "Components of the National Culture," New Left Review , No. 50, July‒August, 1968, pp. 3–4.

    4. Pierre Bourdieu, The Field of Cultural Production: Essays on Art and Literature , New York: Columbia University Press, 1993, pp. 86–7.

    5. Karl Marx, Letter to Arnold Ruge, Kreuznach, September 1843, Letters from the Deutsch-Französische Jahrbücher , at https://www.marxists.org/archive/marx/works/1843/letters/43_09.htm

    6. Larry Ceplair, Anti-Communism in Twentieth-Century America , Santa Barbara: Clio, 2011, pp. 1–2, 12.

    0 0 30 1 1 This entry was posted in Banana republic , Free markets and their discontents , Guest Post , Politics , Social policy , Social values on February 7, 2017 by Yves Smith . Subscribe to Post Comments 31 comments Jim , February 7, 2017 at 1:57 am

    Capitalism requires that total strangers be on the hook for student loans? And if this is Capitalism then why didn't this trend emerge 100+ years ago? Why now?

    Trout Creek , February 7, 2017 at 3:18 pm

    It is a function of the adaption of NeoLiberalism as a governing principle which you can basically start around the time of Reagan.

    Steve Sewall , February 7, 2017 at 5:09 pm

    Because a) the market for a college degree is vastly bigger today than it was 100+ years ago b) tuitions were affordable so there was no way for high-interest lenders ("total strangers") to game the system as they do today.

    Plus I wonder if the legal system or tax code would have let them get away with anything like what they get away with today.

    schultzzz , February 7, 2017 at 1:58 am

    I agree with everything dude says, but the way he says it is so deathly dull and needlessly technical . . .

    it's a shame that someone so openly critical of the university system and culture nonetheless unquestioningly obeys the tradition of: "serious writing has to turn off 99% of the people that might be otherwise interested in the subject."

    Arizona Slim , February 7, 2017 at 8:57 am

    And here I thought I was the only one

    John Wright , February 7, 2017 at 9:59 am

    Yes, his writing caused this reader to do a MEDGO ("my eyes doth gloss over")

    It was technical in its assertions, but has few metrics to quantify the trends such as inflation adjusted administrative cost or inflation adjusted government college funding now vs then.

    There is a mention that the USA government has touted the "upward mobility" or excess value, AKA "consumer surplus", of a college degree to students and their families for years.

    The US government further encouraged the student loan industry with guarantees and bankruptcy relief de-facto prohibited.

    The current system may illustrate that colleges raised their prices to capture more of this alleged consumer surplus, a surplus that may no longer be there..

    If one looks at the USA's current political/economic/infrastructure condition, and asserts that the leaders and government officials of the USA were trained, overwhelmingly, over the last 40 years, in the USA's system of higher education, perhaps this is an indication USA higher education has not served the general public well for a long time.

    The author mentions this important point "These so-called MOOCs, delivered via the internet, hold out the possibility, or embody the threat, of doing away with much of the expensive labor and fixed capital costs embodied in existing university campuses. Clearly the future of higher education hangs in the balance with important implications for both American politics and economic life."

    Maybe the MOOCs are the low cost future as the 4 year degree loses economic value and the USA moves to a life-long continuous education model?

    Arizona Slim , February 7, 2017 at 11:06 am

    ISTR reading that the completion rate for MOOCs is pretty low. As in, 10% of the students who start the course end up finishing it.

    Pete , February 7, 2017 at 1:58 pm

    And that rate doesn't even mention what scores they achieved. MOOCs are hopeless especially since college is now less about getting an education and more about a statement about a young person's lifestyle or identity.

    http://akinokure.blogspot.com/2015/10/college-as-part-of-lifestyle.html

    JustAnObserver , February 7, 2017 at 2:18 pm

    Now sure about the `now' bit. I maybe a bit cynical but I've always thought, even when I was at one, that colleges/universities major function was as a middle-class finishing school for those unable to afford the real deal in Switzerland.

    julia , February 7, 2017 at 10:31 am

    I do not agree and it is deathly dull and needlessly technical. In fact it remains me off the marxistic education I enjoyed growing up in East Germany.
    Maybe it is time to rethink after school education. Physical Labor should loose its stain of being for loosers and stupid people. A whole lot of professions could be better taught through apprentiships and technical college mix.( many younge people would maybe enjoy being able to start qualified work after only 3 additional years of education).
    And do we really need 12 years of standard school education? There are so many kids that do not function well in school.
    Universities should be for the really eager and talented who want to spend a big part of
    their youth learning.
    I guess we need a lot of new ideas to get away from the old paradigma ( anti- marxist or marxist)

    John Wright , February 7, 2017 at 4:00 pm

    I took a couple of classes at the local junior college in automotive smog testing and machining.

    One of the instructors told me the JC administration viewed this Junior College as having two parts, College Prep + vocational education.

    He suggested the administration looked down on the vocational education portion, saying "But we get the jobs".

    Steve , February 7, 2017 at 4:17 pm

    I don't know how you read other works from academics if you think that this was dull.

    Do you or anyone thinking this was "dull" have any examples of academic essays or books that contain useful knowledge but also consider them "shiny?"

    Personally, I thought this was a very good essay as it explains some things I've been thinking about American higher education and quite a few things about my personal university education at a tier-1 research school.

    Altandmain , February 7, 2017 at 2:10 am

    Basically universities have become a cog in the machine of neoliberalism.

    Rather than anything resembling an institution for the public good, it has taken on the worst aspects of corporate America (and Canada). You can see this in the way they push now for endowment money, the highly paid senior management contrasted with poorly paid adjuncts, and how research is controlled these days. Blue skies research is cut, while most research is geared towards short-term corporate profit, from which they will no doubt milk society with.

    I tremble when I think about what all of this means:
    1. Students won't be getting a good education when they are taught by adjuncts being paid poverty wages.
    2. Corporations will profit in the short run.
    3. The wealthy and corporations due to endowment money have a huge sway.
    4. Blue skies research will fall and over time, US leadership in hard sciences.
    5. The productivity of future workers will be suppressed and with it, their earning potential.
    6. Related to that, inequality will increase dramatically as universities worsen the situation.
    7. There will be many "left behind" students and graduates with high debt, along with bleak job prospects.
    8. State governments, starving for tax money will make further cuts, worsening these trends.
    9. Anything hostile to the corporate state (as the article notes) will be suppressed.
    10. With it, academic freedom and ultimately democracy will be much reduced.

    What it means is decline in US technological power, productivity gains, and with it, declining living standards.

    All of these trends already are happening. They will worsen.

    I'd agree that a more readable version of this should be made for the general public.

    James McFadden , February 7, 2017 at 1:23 pm

    Well said.

    But your description suggests an inevitable bleak dystopic future – a self-fulfilling prophesy. The future is not written – we can help determine its course. It starts with grass roots movement building in your neighborhood and community. And I can't think of a more rewarding task then creating a better future for our children.

    But perhaps my farmer's work ethic, my inclination to side with the underdog and stand up to the bully capitalists, are notions that most Americans no longer possess. Perhaps Cornel West is correct when he states: "The oppressive effect of the prevailing market moralities leads to a form of sleepwalking from womb to tomb, with the majority of citizens content to focus on private careers and be distracted with stimulating amusements. They have given up any real hope of shaping the collective destiny of the nation. Sour cynicism, political apathy, and cultural escapism become the pervasive options."

    However, it is my observation that Trump's election has woken this sleepwalking giant, and that his bizarre behavior continues to energize people to resist. So why not rebel and help bring down the neoliberal fascists. Is there any cause more worthy? And for those who won't try because they don't think they can win, consider the words of Chris Hedges: "I do not fight fascists because I will win. I fight fascists because they are fascists."

    Jason , February 7, 2017 at 2:14 am

    I'm going to complain about your headline. A lot of stuff on this blog is obviously relevant only to the USA, and when it's obvious it doesn't need to be mentioned in the headline. But it's not at all obvious that this topic is only about the USA (or North America, since the author is in Canada?), so maybe you could edit the headline to reflect that it is in fact only about the USA?

    My observation of Australian universities is that they have similar problems, although maybe to a lesser extent. But I doubt the same things happen in all countries. I'd be interested to know more about mainland European universities, and ex-Soviet-bloc universities, and Chinese universities, and Third World universities.

    As for "Universities with large endowments are increasingly hedge funds with an educational unit attached", I think the rich universities in the UK (i.e. the richer residential Oxbridge colleges, if you count them as universities – Oxford and Cambridge Universities themselves are not particularly rich – plus maybe Imperial College?) have very little invested in hedge funds and a lot in property. Can anyone confirm or deny that?

    Colonel Smithers , February 7, 2017 at 4:30 am

    Thank you, Jason.

    In the past two decades, the UK's top universities, often called the Russell Group after the Russell Hotel in Russell Square where they met to form a sort of lobby group, have made money and started hiring rock star academics. I don't know how much these academics teach, but they often pontificate in the media.

    Big business, oligarchs and former alumni (often oligarchs) donate money, allowing them to build up their coffers. Imperial is developing an area of west London.

    Oxbridge colleges own a lot of property. Much of the land between Cambridge and London is owned by Cambridge colleges. This goes back to when they were religious institutions and despite Henry VIII's dissolution of the monasteries.

    London Business School has expanded from its Regent's Park base to Marylebone as the number of students, especially from Asia, grow. I have spoken to students from there and Oxford's Said Business School and know people who have guest lectured there. They were not impressed. Plutonium Kun has written about that below.

    Colonel Smithers , February 7, 2017 at 4:38 am

    Correction: number of students grows :-)

    bmeisen , February 7, 2017 at 12:35 pm

    Oxford and Cambridge are British state universities as I understand it. The Russell Group consists primarily of state institutions that have assumed / been given / been restored to an elite role in the British system of higher education, which is overwhelmingly public. Oxford and Cambridge are at the peak of a relatively flat hierarchy of elite public higher education. Higher ed's role in the constitution of British elites is characterized by 3 features: association with an institutional reputation and thereby access to a network, a financial hurdle, and a meritocratic process of selection. Of these the financial hurdle is the least problematic – tuition is still peanuts compared to that at American elite institutions.

    Things have gotten better – you no longer have to be a male member of the church of England to get in – and the system is more democratic than the French system of elite public higher ed, i.e. the ruling elite in the UK can be penetrated by working people, e.g. Corbyn.

    Winston Smith , February 7, 2017 at 3:07 am

    My son is half Japanese and half American and holds a passport with both countries, he is still in elementary school, but my wife and I are encouraging him to go to school in Japan or to Germany (ancestral home) and seek his fortunes outside of the US as the crapification of the US roller coasters out of control.

    Japanese universities are still affordable compared to the US and it's administrative layer, modestly paid, isn't run by MBAs, corporate hacks and neoliberal apologists and others who would better serve the public by decorating a lamp post somewhere with piano wire tightly wrapped around their necks!

    My niece attended Kyoto University, one of the best schools in Japan and it cost her and her parents about 7500.00 a year. She commuted from Nara City and Finished her degree in just under three years and had a job waiting for her in the middle of her third year.

    Now, I agree that Japanese universities have their fare share of problems and insanity, but the thought of dealing with US universities nauseates my wife and me.

    The only school in the US that I would want my son to attend would be Caltech, if he could ever successfully get accepted. They still do great science there, much of it blue sky research. LIGO is still running!
    https://eands.caltech.edu/random-walk-3/

    * disclaimer, I used to be a Caltech employee.

    Colonel Smithers , February 7, 2017 at 4:35 am

    An increasing number of British students are going to the Netherlands and, to a lesser extent, Germany for courses taught in English and for under EUR2000 per annum. Leiden and Maastricht are particularly favoured. Apparently, some Spanish universities are cottoning on to that market.

    Half a dozen years ago, a clown masquerading as a BBC breakfast news reporter went to have a look and condescend. Her concluding remark was, "The question is are continental universities as good as British ones."

    Arizona Slim , February 7, 2017 at 9:00 am

    I have studied at a Spanish university. The courses were excellent.

    Jake , February 7, 2017 at 8:04 am

    But but Japan has sooooo much government debt and must cut cut cut unless it implodes!

    Out of curiosity, may I ask you to elaborate on what you mean when you say japanese universities have 'their fare share of problems and insanity'?

    schultzzz , February 7, 2017 at 2:40 pm

    re: japanese universities.

    The university system is not set up for education. it's a reward to the conformists who studied 12 hours a day all through jr high/highschool to pass the university entrance exams (which notoriously don't test for any useful knowledge). The idea being that if you waste your whole childhood studying for a phoney test, you won't dare question the system once you're in the workforce, as it would mean admitting your whole childhood was wasted!

    Since college is viewed as a reward, rather than a challenge, there's very little learning going on. it's about developing relationships (and drinking problems) with future members of this elite class.

    So most Japanese corporations wind up having to teach the grads everything on the job anyway.

    A Japanese degree doesn't mean 'i know things' it means 'i have already by age 20 sacrificed so much that i don't dare ever rock the boat', which is exactly how the corporations and govt bureaucracies want it.

    You might say "oh but science! Japanese are good at that!"

    But my wife, a nurse, says that it's considered rude to flunk an incompetent student, providing she/he's respectful of the professor. There are doctors who routinely botch surgeries, but firing them would be rude. These doctors would have flunked out of regular (i.e. non-Japanese) universities.

    End rant!

    PlutoniumKun , February 7, 2017 at 3:55 am

    Having on more than one occasion suffered through management restructuring organised by MBA's which did nothing other than reduce productivity in favour of meaningless metrics and increase the power of managers who had no idea how to actually do the job, I'm increasingly coming to the conclusion that the MBA was a clever invention by an anarchist determined to create a virus to undermine capitalism from within. At least, thats the only possible theory that makes sense to me.

    templar555510 , February 7, 2017 at 2:20 pm

    I agree . Putting it more bluntly the MBA is a clever con to get would-be students to sign up in the belief it'll teach them something that can't be taught – how to make money. I've said this on this blog before – the ability to make money is a knack ; it doesn't matter what the field is it's all akin to someone selling cheap goods on a market stall .

    Colonel Smithers , February 7, 2017 at 4:19 am

    Thank you, Yves, for posting.

    Some observations from the UK:

    Many UK universities are targeting foreign, especially Asian, students for the purpose of profit, not education. Some universities refer to students as clients.

    Some provincial universities are opening campuses in London as foreign students only want to study in London.

    There are many Chinese would be students in London this week. Some universities have open days at the moment. When the youngsters and their parents are not attending such days, they go shopping at Bicester Village, just north of Oxford. It's odd to see commuters arriving from Buckinghamshire at Marylebone for work and Chinese and Arab tourists going shopping in the opposite direction, and the reverse in the evening.

    The targeting of rich Asian students, often not up to academic standard, has led to a secondary school in mid-Buckinghamshire, where selective education prevails at secondary / high school, to take Chinese students for the summer term and house them with well to do (only) local parents. The experiment went well for the "grammar" school, i.e. it made money. As for the families who housed the kids, not so much. There were complaints that the children could speak little or no English, which is not what they expected, so the host families could barely interact with the visitors. The school wants to repeat the programme and expand it to a full year. That is the thin end of a wedge as the school will scale back the numbers of local children admitted and probably expand the programme to the entire phase of secondary / high school. It's like running a boarding school by stealth. The school is now an "academy", so no longer under government control and similar to charter schools, and can do what it wants.

    David Barrera , February 7, 2017 at 6:20 am

    Yves Smith,
    I like your introduction to the article. "Universities with large endowments are increasingly hedge funds with an educational unit attached" A recent and very simple but eye opener interview on the subject-Richard Wolff-http://www.rdwolff.com/rttv_boom_bust_for_profit_schools_are_making_money_but_failing_the_grade

    As Henry Heller mentions Bourdieu, I can not find among his bibliography much on the specific increasing dominance of the "free market" over learning institutions. The Field of Cultural Production focuses mainly on the opposition market/art,cultural field and the rules of art. Some of his other works elaborate very well on the transformed reproduction of social agents with different economic and cultural capital weights. His major works on higher learning are The State Nobility and Academic Discourse, which are about the homologies between the hierarchy of higher learning centers and the market position occupiers which the latter produce. All of it within the French context. The great late Bourdieu certainly denounced the increasing free market ideology presence and dominance on "everything human"(i.e Free Exchange, Against the Tyranny of the Market and elsewhere); yet not much in that regard-to my knowledge-on the centers with the granted power to issue higher learning degrees. I guess my point is that Heller's reference to Bourdieu strikes me as a bit odd here.
    Nevertheless, I like Heller's article. Just as incidental evidence: my town's community college President is a CPA and MBA title holder, the Economics 101 class taught does not deviate the slightest from economic orthodoxy doctrine and I must add that, despite-or because of- a 75% tutoring fee increase in the last eight years, the center has consistently generated a surplus aided by the low wages from the vastly non-tenured teachers.

    Colonel Smithers , February 7, 2017 at 6:38 am

    The students from China, Singapore and the Middle East often live in the upscale areas of London, often at home rather than rent. Parents are often in tow. They also drive big and expensive cars.

    It's amazing to see what is driven and by whom around University, Imperial and King's colleges and the London School of Economics in central London. This was remarked upon by US readers a couple of years ago. Parking is not cheap, either.

    A friend and former colleague was planning to rent at Canary Wharf where he was a contractor. He put his name down and was getting ready to move in. The landlord got in touch to say sorry, a family from Singapore was coming and paying more. Apparently, Singaporeans reserve well in advance, even before the students know their exam results.

    A golf course was put up for sale near home. The local authority tipped off some upscale estate agents / realtors from London. A Chinese buyer has acquired the thirty odd acre property. Without planning (construction) permission, the property is worth £1.5m. With planning permission, it's worth £1m per acre. A gated community / rural retreat for the Chinese student community is planned. Oxford, London, Shakespeare Country, Clooney Country and Heathrow are an hour or less away.

    Left in Wisconsin , February 7, 2017 at 10:45 am

    My favorite line:
    Marxism is still regarded with suspicion in the United States.

    I love a good Marxist and I know that a totalizing perspective such as Marxism requires a certain amount of generalization, but I found more to criticize in this post than to recommend it. Apparently entire disciplines have agency ( As if on cue, sociology, psychology, literature, political science, and anthropology all took sides by explicitly rejecting Marxism and putting forward viewpoints opposed to it. History itself stressed American exceptionalism, justified U.S. expansionism, minimized class conflict, and warned against revolution. ).

    It is clearly true that the modern university is overly focused on money-making – both the university enterprise itself and the selling of higher ed to students – but, from my long experience with one big Tier One and lesser knowledge of several others, it is wrong to say that the modern university looks to operate as a business. Indeed, the top heaviness of bureaucratic administration in the modern university is not very business-like.

    IMO what declining public funding has done is allow/force the modern university to aim it's giant vacuum sucker in any and every direction. By the way, if Wisconsin is any example, there are enough Chinese students interested in American university degrees to keep it in business for quite a long time.

    But my biggest complaint is with the history. After first laying out an ideal (but not very) historical vision of the utopian university, in contrast with today's money grubber, he later admits that the mid-century university was not all that open to leftism. Then the miracle of the 1960s, which seems to spring from social protest alone. The real story of the 1960s was the huge expansion of higher ed in the U.S., which led to considerable faculty hiring, which allowed a lot of leftists to get hired in the 1960s and early 1970s (often at second or third-tier schools) when they would not have in the 1950s. This was always going to be a one-time event.

    The author also seems to suggest that universities owe it to Marxists to hire them if their analysis is good. This is a weird argument for a Marxist to make, seemingly entirely oblivious to the overall political economy he otherwise emphasizes. It ends up sounding more than a bit self-serving. I'm not sure lecturing in History on the public dime is Marx's idea of praxis.

    cojo , February 7, 2017 at 11:52 am

    The same can be said about administrative costs in medicine. Seems the parasitic infection is everywhere!

    [Feb 08, 2017] Trade and Political Power: The Past and Possible Ways Forward

    Notable quotes:
    "... We are loosing global power not due to military projection but, that military projection is in support of financial projection which is a plague ..."
    Feb 08, 2017 | www.nakedcapitalism.com
    February 7, 2017 by Yves Smith By Arthur MacEwan, professor emeritus of economics at the University of Massachusetts Boston and a co-founder and associate of Dollars & Sense magazine. This is the final part of a three-part series on the era of economic globalization, the distribution of power worldwide, and the current crisis. It was originally published in the January/February issue of Dollars & Sense, commencing the magazine's year-long "Costs of Empire" project. Parts 1 and 2 are available here and here . Cross posted from Triple Crisis

    The rhetoric of free trade, in any case, is simply one of the tools that the U.S. government, its allies, international agencies, and large firms use in shaping the world economy. Economic and political-military power is the foundation for this shaping. Following World War II, when the U.S. accounted for more than a quarter of world output, it had tremendous economic power-as a market, an investment source, and a source of new technology. U.S. firms had little competition in their global operations and were thus able to penetrate markets and control resources over a wide range (outside of the U.S.S.R., the rest of the East Bloc, and China). Along with this economic power, the military power of the United States was immense. In the context of the Cold War and the rise of democratic upsurges and liberation movements in many regions, the role of the U.S. military was welcomed in many countries-especially by elites facing threats (real or imagined) from the Soviet Union, domestic liberation movements, or both.

    This combination of economic and military power, far more than the rhetoric of free trade, allowed the U.S. government to move other governments toward accepting openness in international commerce. The Bretton Woods conference was a starting point in this process; U.S. representatives at the conference were largely able to dictate the conference outcomes. In terms of international commerce, things worked quite well for the United Sates for about 25 years. Then, however, various challenges to the U.S. position emerged. In particular, the war in Indochina and its costs, competition from firms based in Japan and Europe, and the rise of OPEC and increase in energy costs began to disrupt the dominant U.S. role by the early 1970s.

    Still, while the period after the 1970s saw slower economic growth, both in the United States and in several other high-income countries, the United States continued to hold its dominant position. In part, this was due to the Cold War-the Soviet threat, or at least the perceived threat, providing the glue that attached other countries to U.S. leadership. Yet, by the 1990s, the U.S.S.R. was no more, and China was becoming a rising world power.

    In spite of the changes in the world economy, the United States at first appears to have almost the same share of world output in 2016, 24.7%, as it had in the immediate post-World War II period, and is still considerably ahead of any other country. Yet this figure evaluates output in the rest of the world's countries at market exchange rates. When the figures are recalculated, using the real purchasing power of different currencies, the U.S. share drops to 15.6%, behind China's 17.9% of world output. Of course, as China has a much larger population than the United States, even using the purchasing power figures, per person GDP in the U.S. is almost four times greater than in China; it would be almost 7 times greater using the market exchange rates.

    The rise of China has not moved the United States off its pedestal as the world's dominant economic power. Moreover, U.S. military strength remains dominant in world affairs. Yet the challenge is real, even to the point that China has recently created an institution, providing development loans to low-income countries, to be an alternative to the (U.S.-dominated) World Bank. Investment by Chinese firms, too, is spreading worldwide. Then there are the military issues in the South China Sea.

    At the same time, the United States is engaged in seemingly intractable military operations in the Middle East, and has continued to maintain its global military presence as widely as during the Cold War. Having long taken on the role of providing the global police force, for the U.S. government to pull back from these operations would be to accept a decline in U.S. global power. But, further, the extensive and far flung military presence of U.S. forces is necessary to preserve the rules of international commerce that have been established over decades. The rules themselves need protection, regardless of the amount of commerce directly affected. The real threat to "U.S. interests" posed by the Islamic State and like forces in the Middle East, Africa, and parts of East Asia is not their appalling and murderous actions. Instead, their threat lies in their disruption and disregard for the rules of international commerce. From Honduras and Venezuela to Saudi Arabia and Iraq, if U.S. policy were guided by an attempt to protect human rights, the role of U.S. military and diplomatic polices would be very different.

    Continuing to operate on a global level to halt threats to the "rules of the game"-in a world were economic power is shifting away from the United States-this country is threatening itself with imperial overreach. Attempting to preserve its role in global affairs and to maintain its favored terms of global commerce, the U.S. government may be taking on financial and military burdens that it cannot manage. In the Middle East in particular, the costs of military operations during the 21st century have run into the trillions of dollars. Military bases and actions are so widespread as to limit their effectiveness in any one theater of operations.

    The potential danger in this situation is twofold. On the one hand, the costs of these operations and the resulting strain on the U.S. government's budget can weaken the operation of the domestic economy. On the other hand, in the context of the rising challenges to the U.S. role in global affairs and the rising role of other powers, especially China but also Russia, U.S. forces may enter into especially dangerous attempts to regain U.S. power in world affairs-the treacherous practice of revanchism.

    Are There Alternatives?

    Although globalization in the broad sense of a geographic expansion of economic, political, social, and cultural contacts may be an inexorable process, the way in which this expansion takes place is a matter of political choices-and political power . Both economic and political/military expansion are contested terrain. Alternatives are possible.

    The backlash against globalization that appeared in 2016, especially in the U.S. presidential campaign, has had both progressive and reactionary components. The outcome of the election, having had such a reactionary and xenophobic foundation, is unlikely to turn that backlash into positive reforms, which would attenuate economic inequality and insecurity. Indeed, all indications in the period leading up to Trump's inauguration (when this article is being written) suggest that, whatever changes take place in the U.S. economic relations with the rest of the world, those changes will not displace large corporations as the principal beneficiaries of the international system.

    Nonetheless, the Sanders campaign demonstrated the existence of a strong progressive movement against the current form of globalization. If that movement can be sustained, there are several reforms that it could push that would alter the nature of globalization and lay the foundation for a more democratic and larger changes down the road (Sanders' "revolution"). Two examples of changes that would directly alter U.S. international agreements in ways that would reduce inequality and insecurity are:

    Changing international commercial agreements so they include strong labor rights and environmental protections. Goods produced under conditions where workers' basic rights, to organize and to work under reasonable health and safety conditions, are denied would not be given unfettered access to global markets. Goods whose production or use is environmentally destructive would likewise face trade restrictions. (One important "restriction" could include a carbon tax that would raise the cost of transporting goods over long distances.) Effective enforcement procedures would be difficult but possible.

    Establishing effective employment support for people displaced by changes in international commerce. Such support could include, for instance, employment insurance funds and well funded retraining programs. Also, there would need to be provisions for continuing medical care and pensions. Moreover, there is no good reason for such support programs to be limited to workers displaced by international commerce. People who lose their jobs because of environmental regulations (such as coal miners), technological change (like many workers in manufacturing), or just stupid choices by their employers should have the same support.

    Several other particular reforms would also be desirable. Obviously, the elimination of ISDS is important, as is cessation of moves to extend U.S. intellectual property rights. The reforms would also include: global taxation of corporations; taxation of financial transactions; altering the governance the IMF, World Bank, and WTO to reduce their role as instruments of the United States and other high income countries; protections for international migrants and protection of their rights as workers. The list could surely be extended. Changes in international economic relations, however, cannot be separated from political changes. The ability of the United States and its allies to shape economic relations is tied up with military power. Military interventions and the threat of military interventions have long been an essential foundation for U.S. power in the global economy. These interventions and threats are often cloaked in democratic or humanitarian rhetoric. Yet, one need simply look at the Middle East to recognize the importance of the interests of large U.S. firms in bringing about these military actions. (Again, see the box on Smedley Butler.) It will be necessary to build opposition to these military interventions in order to move the world economy in a positive direction- to say nothing of halting the disastrous humanitarian impacts of these interventions.

    No one claims that it would be easy to overcome the power of large corporations in shaping the rules of international commerce in agreements or to reduce (let alone block) the aggressive military practices of the U.S. government. The prospect of a Trump presidency certainly makes the prospect of progressive change on international affairs-or on any other affairs-more difficult. There is, however, nothing inevitable about the way these central aspects of globalization have been organized. There are alternatives that would not undermine the U.S. economy (or other economies). Indeed, these alternatives would strengthen the U.S. economy in terms of improving and sustaining the material well-being of most people.

    The basic issues here are who-which groups in society-are going to determine basic economic policies and by what values those policies will be formulated.

    Gman , February 7, 2017 at 12:22 pm

    An over extended Soviet Empire collapsed in no small part due to its obsession with winning a war, albeit one that thankfully remained 'cold', that it never could.

    A corrupt, nepotistic distant, paranoid elite that instead of dividing its efforts into looking after its own society's well-being, as well a apparently just defending it, opted for near as dammed bankrupting itself attempting to feed an insatiable military machine it could ill afford (and would mostly never use) at its increasingly disaffected, divided, restive people's expense.

    Mind you, they were just dumb Commies.

    JTMcPhee , February 7, 2017 at 3:25 pm

    First, did the Soviet state "bankrupt itself damm near" mostly by trying to feed an "insatiable military machine," or did the wealth of the Soviets get dissipated into other ratholes as well, alongside various external pressures and effects? And what scale applied to each political-decision "allocation"? One view, among a flood of intersecting and competing interpretations, of course:

    The stunning collapse of the Soviet empire in 1989-91 has often been heralded in the West as a triumph of capitalism and democracy, as though this event were obviously a direct result of the policies of the Reagan and Thatcher governments. This self-congratulatory analysis has little relation to measurable facts, circumstances, and internal political dynamics that were the real historical causes of the deterioration of the Soviet empire and ultimately the Soviet state itself. Fiery political speeches and tough diplomatic postures make good theater, but they are ineffective at forcing political transformation in totalitarian nations, as is proven by the persistence of far less powerful Communist regimes in Cuba and east Asia in the face of punishing trade embargos. The key to understanding the reasons for the demise of the Soviet Union is to be found not in the speeches or policies of Western politicians, but in internal Soviet history.

    1. Stagnation in the 1970s

    The Soviet Union was already in decline as a world power well before 1980. Any illusions of global Communist hegemony had evaporated with the collapse of Sino-Soviet relations in the 1960s. As the Nixon administration improved American relations with an increasingly independent China, the Soviets saw a strategic need to scale down the nuclear arms race, which placed enormous strains on its faltering economy. The threat of a nuclear confrontation was reduced considerably by the anti-ballistic missile (ABM) and strategic arms limitation treaties (SALT) contracted with the Nixon administration in 1972. This détente, or easing of tensions, allowed Leonid Brezhnev to focus on domestic economic and social development, while boosting his political popularity.

    Around 1975, the Soviet Union entered a period of economic stagnation from which it would never emerge. Increasingly, the USSR looked to Europe, primarily West Germany, to provide hard currency financing through massive loans, while the U.S. became a major supplier of grain.[1] Despite moments of anti-Communist grandstanding, the Americans and Western Europeans maintained trade relations with the cash-strapped Soviet Union, which dipped into its Stalin-era gold reserves to increase availability of consumer goods .

    Foreign trade and mild economic reforms were not enough to overcome the inefficiencies of the Soviet command economy, which remained technologically backward and full of corruption. Economic planners were frequently unable to diagnose and remedy problems, since they were given false reports by officials who only pretended to be productive. Soviet living standards remained poor by Western standards. By 1980, only 9 percent of Soviets had automobiles, which was actually a vast improvement under Brezhnev. Very little was computerized, due to state paranoia about the use of telecommunications for counterrevolutionary purposes. The USSR was able to endure this technological lag because its closed economy protected it from competition, but its ability to maintain military superiority increasingly depended on the ability to keep pace with Western modernization.

    In his radio broadcasts during the late 1970s, Ronald Reagan complained that the capitalist nations propped up the intrinsically flawed Soviet regime, instead of allowing it to naturally collapse from its own inefficiency and inhumanity.[2] In contrast to his later hagiographers, Reagan did not envision defeating the Soviet Union by forceful action, but instead he perceived that the regime would collapse from its own failings once the West removed its financial life support system. It is this early Reagan, far more thoughtful than he is generally credited, who proved to be most astute in diagnosing the state of the USSR. It did not need a foreign enemy to "defeat" it, for it was deteriorating from within.
    http://www.arcaneknowledge.org/histpoli/soviet.htm

    And I recall the Soviet military leadership was largely (no, not exclusively of course, humans being what they are) reacting to the clear and present danger that "the West" presented. Among many other considerations, of course. In the Great Game of "chicken," in which we all are mostly passengers in the speeding cars with loony drivers ya-hooing out the windows, I recall the Soviets were the ones to veer off from that head-on collision that might have ended it all earlier than it seems increasingly likely to end anyway. And Russian leadership seems more concerned about the survival of the nation than our own clown-car leadership.

    Seems to me that all of us ordinary people, many of whom would gladly take advantage of opportunities to do some looting themselves, to "get ahead" in the "rat race," if only those opportunities were presented, have insufficient collective concern about the many systems, living and political-economy, that apparently are collapsing or running out of control. And patently the military-security monkey that's riding our backs is doing a p!ss-poor job of "defending us" in any ordinary sense of the term, and not even a vary good job of playing Imperial Forces. Though of course the net effects of military and political chaos-building and destabilization do blast out a nice open-pit mine for corporate looters to get at the extractables..

    But yeah, the halls of history are full of echoes and shadows and reflections in a glass darkly And I wonder if London bookies are running a line on when history, as recorded and debated and acted out by humans, will REALLY end, thanks to our wonderful unbridled inventiveness and lack of that genetic predisposition to survive as a species that ants and termites and rats and cats and other "lesser creatures" seem to have

    Anon , February 7, 2017 at 12:50 pm

    Commies? That last paragraph sounds like post-WWII history in the US.

    Gman , February 7, 2017 at 2:13 pm

    ;-)

    jsn , February 7, 2017 at 12:53 pm

    Training people for jobs does not create jobs for them. Training would be an organic function of profitable businesses seeking employees. I'm old enough to remember what that was like.

    The issue is JOBS pure and simple for everyone that wants or needs one.

    Prosperous, secure people make progressive change possible: desperate, insecure people don't. If you want security, make people secure.

    Jonf , February 7, 2017 at 3:52 pm

    Gotta chime in here. You are right on the money here.

    dragoonspires , February 7, 2017 at 4:24 pm

    There's the rub. Because the only way in the future to ensure enough of these jobs may be by using tax money from the well off to at least partially fund the scarce and missing jobs that won't be created otherwise. How willing do you think they will be to see their tax dollars funding progressive causes? We say progressive/they say socialist.

    Until we convince enough people of these ideas and they actually vote (if their vote is still possible as suppression intensifies), this won't likely happen. If you have a better idea on how to create these well paying secure jobs in the face of automation, etc. outside of winning elections the old fashioned way and using policies, I'm open minded and listening.

    Marilyn Delson , February 7, 2017 at 1:05 pm

    Been down this "protections for workers" road before and the TPP (Obama, Clinton). Sorry neolib-neocon globalist oligarchs. Rewording the messaging still has the same shit outcome for the middle class.

    Synoia , February 7, 2017 at 9:48 pm

    The potential danger in this situation is twofold. On the one hand, the costs of these operations and the resulting strain on the U.S. government's budget can weaken the operation of the domestic economy.

    Really? When the US can just issue the dollars to pay the bills? How does this weaken the economy?

    TomDority , February 7, 2017 at 1:17 pm

    "Following World War II, when the U.S. accounted for more than a quarter of world output, it had tremendous economic power -- as a market, an investment source, and a source of new technology. U.S. firms had little competition in their global operations and were thus able to penetrate markets and control resources over a wide range (outside of the U.S.S.R., the rest of the East Bloc, and China)."

    IMHO

    – Of course we did because our investments were in technology, industry and production which was tightly coupled with investment in infrastructure with a "market" much more free from economic rent. Economic rent pushes all production costs up particularly where property prices (farm land, indutrial land and home land use) surge or boom.

    "U.S. government to pull back from these operations would be to accept a decline in U.S. global power."

    IMHO

    We are loosing global power not due to military projection but, that military projection is in support of financial projection which is a plague – responsible for global destitution in all the plenty the planet offers – we are obviously doing something wrong? yes. Further to that, we should not have weaponized finance and unleashed it on ourselves or anybody else. Yes, let us cede all to private interests – look how well that goes..snarc.

    "The potential danger in this situation is twofold. On the one hand, the costs of these operations and the resulting strain on the U.S. government's budget can weaken the operation of the domestic economy. "

    IMHO

    The costs of these (assume military) operations have not put a strain on US government budget but, the biggest strain on the budget is our unjust revenue system and finacialization of our economy where "investment" drives asset appreciation, making everything more expensive for living and working but, in no way involves the employment of labor to produce something worth having .say something like a habitable planet.
    So the real issue is we believe our own hubris to the point of mostly extincting the planet.

    Sorry for the sad rant we need to look at the basis for prosperity and of the opposite, instead we see the results and assume it to be a natural cause when in fact it is not natural.

    Below is a quote from near a hundred years ago

    GETTING SOMETHING FOR NOTHING

    ...The/reat sore spot in our modern commercial life is found on the speculative side. Under present laws, which foster and encourage speculation business life is largely a gamble, and to "get something for nothing" is too often considered the keynote to "success." The great fortunes of today are nearly all speculative fortunes; and the ambitious young man just starting out in life thinks far less of producing or rendering service than he does of "putting it over" on the other
    fellow This may seem a broad statement to some; but thirty years of business life in the heart of American commercial activity convinces me that it is absolutely true. If, however, the speculative incentive in modern commercial life were eliminated, and no man could become rich or successful unless he gave
    "value received" and rendered service for service, then indeed a profound change would have been brought in our whole commercial system, and it
    would be a change which no honest man would regret.-John Moody, Wall Street Publisher, and President of Moody's Investors' Service. Circa 1924

    Left in Wisconsin , February 7, 2017 at 2:14 pm

    Goods produced under conditions where workers' basic rights, to organize and to work under reasonable health and safety conditions, are denied would not be given unfettered access to global markets.

    American goods, too?

    steelhead23 , February 7, 2017 at 8:16 pm

    For policy-makers, decisions made on the basis of power, prestige, and profit are far more palatable than those made on the basis of human rights and the environment. This may seem simple, and the right thing to do morally, but it really is difficult. Your counterparties (let's say, the Saudis) are known to punish minor crimes severely and they routinely abuse foreign workers. So, you want to add a few dinars to the price of oil. "Not so fast," says the sheikh. "You have the largest prison population in the world, so we're adding a tax to the price of wheat," and midwest farmers are up in arms.

    Don't get me wrong. I happen to think that trying to even the playing field and improve the lot of workers and the environment worldwide is a great idea. I just think it would be very hard in reality and would create both domestic and international tensions.

    Dana , February 7, 2017 at 10:47 pm

    In this factual and historical state of affairs, is it necessary to prove in detail that there is no room today for any so-called political neutrality – the neutrality of the trade unions with regard to political parties and political struggles?

    Altandmain , February 7, 2017 at 11:16 pm

    There needs to be a push to reshore manufacturing into the US.

    I don't agree with Trump's other policies, but he's got an important point on this one. The US began to lose its middle class as the worst of the outsourcing happened.

    [Feb 08, 2017] A Utilitarian Welfare Analysis of Trade Liberalization

    econpapers.repec.org

    The currently established welfare criterion used in international trade theory results in conclusions that are not only intellectually dishonest and deceptively misleading but are not as value free as is commonly believed. Although academic economists have devoted much effort to understanding the distributional effects of trade, the current welfare conclusions of trade basically ignore entirely the distributional effects. This paper argues that trade policy needs to be framed within a legitimate moral framework that moves distribution to the forefront. The welfare effects of trade should be judged by what actually happens, not by what could potentially happen in an idealized world with costless transfers.

    In the first section the inadequacy of current international welfare economics is discussed. Second, the justification for using a utilitarian framework is developed along with a brief history of the doctrine and its role in Cambridge welfare economics. Next the properties of a utility function that would be realistic as well as having desirable mathematical properties are discussed. Welfare considerations would not be especially important if trade did not create significant redistributions; therefore the size of the redistributions relative to the efficiency gains from trade liberalization is examined. Finally, the welfare effects of trade liberalization using various trade models and simulations are discussed.

    The current approach to the welfare analysis of trade is to follow the recommendation of Hicks and Kaldor and equate national welfare with real national income and ignore entirely how income is distributed. Although admitting that considering distribution involves an unscientific value judgment, numerous economists (such as I.M.D. Little, Frank Knight, Edward Chamberlin) have concluded that distribution is too important to ignore and it is better to consider it even if that makes the analysis less than scientific. As Blaug has stated (1978,p. 626), "the true function of welfare economics is to invade the discipline of applied ethics rather than to avoid it."

    The basic objective of trade policy under modern welfare analysis therefore is to maximize national income. This outcome is considered optimal because of the Hicks-Kaldor compensation principle whereby everyone could potentially be made better off than in any other alternative with the appropriate lump sum transfers. For some, the possibility that these transfers could be made is sufficient, regardless of whether any transfers are actually made. For others, there is a naive belief that after all the income maximizing policies are implemented, that the government (or society) then consistently redistributes income in a manner consistent with its specific social welfare function. However, Rodrik (1997, p.30) is correct when he states that in regard to trade policy changes, "compensation rarely takes place in practice and never in full."

    Even if society wanted to redistribute income, however, it can not be done in a zero costs lump sum fashion.

    [Feb 07, 2017] Short-Run Effects of Lower Productivity Growth A Twist on the Secular Stagnation Hypothesis

    Notable quotes:
    "... There are two major forces behind secular stagnation: ..."
    "... 1. Neoliberalism which undermines the purchasing power of lower 80% of population due to redistribution of wealth up. Like in the "classic Marxism" theory of the absolute impoverishment of the working class under capitalism. ..."
    "... 2. End of cheap oil, which undermines both productivity growth and, simultaneously, neoliberal globalization, which was the source of (fake) productivity growth in GDP statistics (which by itself is very suspect). ..."
    Feb 07, 2017 | economistsview.typepad.com

    Short-Run Effects of Lower Productivity Growth : A Twist on the Secular Stagnation Hypothesis: Despite interest rates being very close to zero, US GDP growth has been anemic in the last four years largely due to lower optimism about the future, more specifically to downward revisions in growth forecasts, rather than legacies of the past. Put simply, demand is temporarily weak because people are adjusting to a less bright future.

    anne -> anne... , February 06, 2017 at 04:30 PM
    Having read the paper again, the work still reads as parody. I find no coherence.
    libezkova -> anne... , February 06, 2017 at 06:44 PM
    Anne,
    > Having read the paper again, the work still reads as parody. I find no coherence.

    I agree. Looks like

    There are two major forces behind secular stagnation:

    1. Neoliberalism which undermines the purchasing power of lower 80% of population due to redistribution of wealth up. Like in the "classic Marxism" theory of the absolute impoverishment of the working class under capitalism.

    2. End of cheap oil, which undermines both productivity growth and, simultaneously, neoliberal globalization, which was the source of (fake) productivity growth in GDP statistics (which by itself is very suspect).

    [Feb 07, 2017] Don't Side With Neoliberalism in Opposing Trump

    Notable quotes:
    "... By Les Leopold, the director of the Labor Institute, who is currently working with unions and community organizations to build the educational infrastructure for a new anti-Wall Street movement. His new book Runaway Inequality: An Activist's Guide to Economic Justice serves as a text for this campaign. All proceeds go to support these educational efforts. Originally published at Alternet ..."
    "... Thin Reed? Authoritarian rule for the oligarchs ..."
    "... Most manufacturing jobs are lost via automation, not outsourcing. ..."
    "... wasn't ..."
    Feb 07, 2017 | www.nakedcapitalism.com
    Posted on February 6, 2017 by Yves Smith Yves here. As reader John Z pointed out, the policy program described in this post is very much in synch with the recommendations Lambert has been making. One small point of divergence is that Leopold reinforces the idea that taxes fund Federal spending. Taxes serve to create incentives, and since income inequality is highly correlated with many bad social outcomes, including more violence and shorter lifespans even for the rich, progressive taxation is key to having a society function well. However, he does get right (as very few do) that the purpose of a transaction tax is to discourage the activity being taxed, rather than raise money (aside from the MMT issue, the tax would shrink the level of transactions in question, making it not very productive in apparent revenue terms).

    By Les Leopold, the director of the Labor Institute, who is currently working with unions and community organizations to build the educational infrastructure for a new anti-Wall Street movement. His new book Runaway Inequality: An Activist's Guide to Economic Justice serves as a text for this campaign. All proceeds go to support these educational efforts. Originally published at Alternet

    During the Bernie Sanders campaign I heard a high-level official give a powerful speech blasting the Trans-Pacific Partnership Act for the harm it would bring to workers, environmentalists and to all who cared about protecting democracy.

    Donald Trump now has signed an executive order pulling out of the TPP negotiations.

    Is this a victory or a defeat for the tens of thousands of progressives who campaigned to kill the TPP?

    On the same day Trump killed the TPP, he met with corporate executives saying he would cut taxes and regulations to spur business development. But he also warned that "a company that wants to fire all of the people in the United States and build some factories someplace else and think the product is going to flow across the border, that is not going to happen." He said he would use "a substantial border tax" to stop those practices.

    Is this a victory or a defeat for workers and unions who for three decades have been begging politicians to stop the outsourcing of decent middle-class jobs?

    Breaking the Spell of Neoliberalism

    Our answers may be clouded by four decades of the neoliberal catechism-tax cuts on the wealthy, Wall Street deregulation, privatization of public services and "free" trade. Politicians, pundits and overpaid economists long ago concluded that such policies will encourage a "better business climate," which in turn will lead to all boats rising. Instead those very same policies led to a massive financial crash, runaway inequality and a revolt against neoliberalism which fueled both the Sanders and Trump insurgencies. (See enough facts to make you nauseous.)

    This ideology is so pervasive that today no one is shocked or surprised to see Democratic governors on TV ads trying to lure business to their states by promising decades of tax holidays. No one gags when politicians lavish enormous tax gifts on corporations-even hedge funds-in order to keep jobs from leaving their states .

    Similarly, we have grown accustomed to the neoliberal notion that we should go deeply into debt in order to gain access to higher education. Free higher education, which was the norm in New York and California until the 1970s, was "unrealistic" until Sanders rekindled the idea.

    More troubling still, elites propagated the idea that public goods should not be free and available to all via progressive taxation. Rather public goods were denigrated and then offered up for privatization. Even civil rights icon Representative John Lewis used the neoliberal framework to attack Bernie Sanders' call for free higher education and universal health care: "I think it's the wrong message to send to any group. There's not anything free in America. We all have to pay for something. Education is not free. Health care is not free. Food is not free. Water is not free. I think it's very misleading to say to the American people, we're going to give you something free."

    Obama/Clinton Didn't, Trump did

    Ironically, while Lewis is defending neoliberalism, Trump actually is attacking two of its foundational elements-free trade and unlimited capital mobility. No