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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 YouTube on neoliberalism 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


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(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

[Mar 29, 2017] The reason UK economics students revolted

Notable quotes:
"... And that's the reason UK economics students revolted: "Few mainstream economists predicted the global financial crash of 2008 and academics have been accused of acting as cheerleaders for the often labyrinthine financial models behind the crisis. Now a growing band of university students are plotting a quiet revolution against orthodox free-market teaching, arguing that alternative ways of thinking have been pushed to the margins. ..."
"... why economists failed to warn about the global financial crisis and for having too heavy a focus on training students for City jobs. ..."
"... But the answer to their question is very simple. Neoliberals are in power and they dictate what is to be taught in Economics courses. They also promote and sustain "willing charlatans" like Mankiw, who poisons and indoctrinates students with neoclassical junk. ..."
Mar 29, 2017 | economistsview.typepad.com
JohnH -> Peter K.... , March 27, 2017 at 06:51 PM
So true; "SWL has never addressed what is happening in the real world."

And that's the reason UK economics students revolted: "Few mainstream economists predicted the global financial crash of 2008 and academics have been accused of acting as cheerleaders for the often labyrinthine financial models behind the crisis. Now a growing band of university students are plotting a quiet revolution against orthodox free-market teaching, arguing that alternative ways of thinking have been pushed to the margins.

Economics undergraduates at the University of Manchester have formed the Post-Crash Economics Society, which they hope will be copied by universities across the country. The organisers criticise university courses for doing little to explain why economists failed to warn about the global financial crisis and for having too heavy a focus on training students for City jobs."
https://www.theguardian.com/business/2013/oct/24/students-post-crash-economics

... ... ...

libezkova -> JohnH... , March 27, 2017 at 09:40 PM
"why economists failed to warn about the global financial crisis and for having too heavy a focus on training students for City jobs."

https://www.theguardian.com/business/2013/oct/24/students-post-crash-economics"

That's a very good link. Thank you !

But the answer to their question is very simple. Neoliberals are in power and they dictate what is to be taught in Economics courses. They also promote and sustain "willing charlatans" like Mankiw, who poisons and indoctrinates students with neoclassical junk.

[Mar 28, 2017] Economics taught by neo-classical economics is like the Natural Sciences departments being run by creationists

Notable quotes:
"... This has echoes of a protest by students in 2011 at Harvard when a group of students walked out of the lectures by Dr Gregory Manilow. What has happened to them? ..."
"... Good for them. The economics profession has been dominated by neoliberal theoreticians for far too long. It needs bringing back to the real world. ..."
"... i went to the LSE to study maths and statistics with a sprinkling of economics (my first taste of it at the time). after a few months i was of the opinion it is based on terrible assumptions. e.g. the needs of the average consumer, which are then blown up into fantastical macroeconomical proportions which only led to flawed arguments. The subsequent financial crisis only backed this up. ..."
Mar 28, 2017 | discussion.theguardian.com
RobinS , 25 Oct 2013 5:20

What a ghastly indictment of Manchester, and other economics departments - obviously being very economic with their subject. Sounds a bit like the Natural Sciences departments being run by creationists.

ResponsibleWellbeing , 25 Oct 2013 5:23

This should be the first class for the whole students in economics.
What are the limits in ecology ecosystem? And what are the needs/capacities for human flourishing?

Adventures in New Economics 2: Donut Economics, Kate Raworth

http://www.youtube.com/watch?v=VieEtdcmjtI

This is an open/complex map with a compass in values that I've built trying to go through both main concepts. It's valid for personal development / companies / communities / nations / whole planet.

bit.ly/1775pbV

Jed Bland , 25 Oct 2013 5:36

This has echoes of a protest by students in 2011 at Harvard when a group of students walked out of the lectures by Dr Gregory Manilow. What has happened to them?

I personally have observed in other disciplines that teaching tends to be a generation behind current thinking, Particularly when it has more to do with ideology than science.

Some ten years ago, a movement called the Post-Autistic Ecomoncs Movement had a considerable influence in Europe but has no doubt disappeared in the face of the greed which is central supporting feature of today's neoliberalism.

SteveTen , 25 Oct 2013 5:44

Good for them. The economics profession has been dominated by neoliberal theoreticians for far too long. It needs bringing back to the real world.

skyblueravo , 25 Oct 2013 5:45

i went to the LSE to study maths and statistics with a sprinkling of economics (my first taste of it at the time). after a few months i was of the opinion it is based on terrible assumptions. e.g. the needs of the average consumer, which are then blown up into fantastical macroeconomical proportions which only led to flawed arguments. The subsequent financial crisis only backed this up.

I commend this thinking by the students but if I was one of their parents forking out 27k i would probably tell them to pass the exams they need to and get out and start earning.

LSE is a godawful uni also, unless you have given spawn to gordon gekko dont bother with it.

kongshan , 25 Oct 2013 5:46

Alternative theories and models??? Well they are currently practiced by North Korea and these students will be more than welcomed by the Kim family to ply their trade there.

UnlearningEcon -> kongshan , 25 Oct 2013 7:58

Actually, "alternative theories" were practiced by South Korea, which has been quite a success story. It's not either the status quo or state communism, you know.

[Mar 28, 2017] The robber barons and their useful idiots have certainly achieved what they set out to do.

Mar 28, 2017 | discussion.theguardian.com
radicalchange 25 Oct 2013 6:41

For an understanding of how we came to have thrust upon us the "Dismal Science" of neo-classical economics, which took shape in the 1880's - 1890's, I recommend reading "The Corruption of Economics" by Mason Gaffney.

Here is a link to some excerpts from his book,
http://www.politicaleconomy.org/gaffney.htm

Essentially, economic thinking was hijacked by the robber barons who through building and funding universities were able to subvert the teaching of economics to suit their own agenda. Classical economics with a sound basis of three factors of production was replaced by voodhoo economics which reduced the three factors of production to only two. Whereas once "land" was a factor of production in its own right alongside "capital" and "labour", it was magicked away to be incorporated as "capital" for the purpose of the land owning robber barons.

As anyone with a few braincells would know, "land" is a distinct factor of production in its own right, and not only that, it is the primary factor since neither "capital" or "labour" would exist without it. But "land" can exist without both the other two factors which makes it unique and makes it primary and yet voodhoo economics has managed to hide this fact so well through the employment of clever mathematics to create an illusion of being a solid discipline.

http://www.henrygeorge.org/pcontents.htm

Neoclassical economics is the idiom of most economic discourse today. It is the paradigm that bends the twigs of young minds. Then it confines the florescence of older ones, like chicken-wire shaping a topiary. It took form about a hundred years ago, when Henry George and his reform proposals were a clear and present political danger and challenge to the landed and intellectual establishments of the world. Few people realize to what a degree the founders of Neoclassical economics changed the discipline for the express purpose of deflecting George, discomfiting his followers, and frustrating future students seeking to follow his arguments. The stratagem was semantic: to destroy the very words in which he expressed himself.


To most modern readers, probably George seems too minor a figure to have warranted such an extreme reaction. This impression is a measure of the neo-classicals' success: it is what they sought to make of him. It took a generation, but by 1930 they had succeeded in reducing him in the public mind. In the process of succeeding, however, they emasculated the discipline, impoverished economic thought, muddled the minds of countless students, rationalized free-riding by landowners, took dignity from labor, rationalized chronic unemployment, hobbled us with today's counterproductive tax tangle, marginalized the obvious alternative system of public finance, shattered our sense of community, subverted a rising economic democracy for the benefit of rent-takers, and led us into becoming an increasingly nasty and dangerously divided plutocracy.

Not one economics graduate have I met that has heard of Henry George but yet they have all heard of Karl Marx. The robber barons and their useful idiots have certainly achieved what they set out to do.

radicalchange -> radicalchange , 25 Oct 2013 6:45

As clarification the two paragraphs in italics are excerpts from the "Corruption of Economics" by Mason Gaffney. The link to Henry George's "Progress and Poverty" is, http://www.henrygeorge.org/pcontents.htm

[Mar 28, 2017] I taught Economics for forty years and over 30 of those to Singaporean scholars destined to Oxford, Cambridge and Ivy League universities; in all those years I was aware of the lies I had to teach in order to pass university entrance exams.

Notable quotes:
"... Then Economic History was virtually withdrawn from university Economics and other courses so that only the"lies" would be taught backed up by unquestioned (i.e. purely deductive) Mathematics. It is an academic crime ..."
Mar 28, 2017 | profile.theguardian.com
ptah , 25 Oct 2013 7:55

If a viable economic solution emerged from the universities - one which remedied the classical models and trumped the broken neo-liberal systems, how would we recognise it?

To provide some context - and I am in no way qualified to discuss this topic really but, the first machines to produce logic emerging from Bletchley park were not fully recognised for their potential - the computer revolution took place elsewhere. The UK is absolute rubbish at recognising innovation!

Good luck to the students. I hope many more get involved in this debate.

ID2322670 , 25 Oct 2013 8:24

I taught Economics for forty years and over 30 of those to Singaporean scholars destined to Oxford, Cambridge and Ivy League universities; in all those years I was aware of the lies I had to teach in order to pass university entrance exams.

I attempted to follow the thesis that every economic theory however old or new was attempting to answer a unique contemporary economic problem and therefore only Economic History was of relevance in understanding a theory be Adam Smith or Keynes or even (unacademically) Thatcherism.

My students found all such information useless to passing Economics exams but interesting for "life".

Then Economic History was virtually withdrawn from university Economics and other courses so that only the"lies" would be taught backed up by unquestioned (i.e. purely deductive) Mathematics. It is an academic crime.

[Mar 28, 2017] Zombie theories continue on their path of destruction.

Notable quotes:
"... Neoliberal economics not only led to the crash of 2007/8 it is continuing to wreak havoc. A good current example is pension schemes - something we will depend on one day. They are valued using the purest form of free market thinking: the efficient markets hypothesis - the idea that asset markets always perfectly embody all relevant information. It is akin to belief in magic. ..."
"... It is amazing to read how narrow economics education is in modern Britain. It is not only intellectually unenlightened and literally dangerous, given the power many economics graduates can wield, amplified by the extraordinary sums and resources they manage, it also does a great disservice to people who are entitled to a proper education which, clearly, they are not receiving in this monotheistic model. ..."
"... It reminds me precisely of the so-called "religious education" I received in Ireland which was nothing of the sort. All I got was instruction in Catholic doctrine and ethics; there was no instruction in the beliefs of any other Christian sects, let alone what goes on in the other major world religions such as Hinduism, Judaism, or Islam. What I know about them I taught myself in later life. ..."
"... It seems that the same shameful parochial narrowness, intellectual provincialism, and "one true religion" ethic prevails in British economic so-called "education". ..."
"... On another matter, the revelation that economists "ignore empirical evidence that contradicts mainstream theories" destroys any notion that economics is a science, a silly claim I have always opposed. All that it reveals is that economists have no idea what science is. ..."
Mar 28, 2017 | discussion.theguardian.com
harrybuttle, 26 Oct 2013 7:25

Neoliberal economics not only led to the crash of 2007/8 it is continuing to wreak havoc. A good current example is pension schemes - something we will depend on one day. They are valued using the purest form of free market thinking: the efficient markets hypothesis - the idea that asset markets always perfectly embody all relevant information. It is akin to belief in magic.

Yet many professionals who run pension schemes and the government regulator all support it's use because it suits them - it deflects responsibility from them while they continue to be paid. It's effects on society are disastrous as it leads us to believe are insolvent. The government and actuarial profession accepted all this and enshrined it in law.

A topical example is the universities pension scheme the USS which BBC Newsnight and Radio 4 have just told us has a 'black hole' of a deficit.

Many of us thought that the EMH would ditched after its spectacular failure but no. Zombie theories continue on their path of destruction.

Josifer , 27 Oct 2013 01:00
It is amazing to read how narrow economics education is in modern Britain. It is not only intellectually unenlightened and literally dangerous, given the power many economics graduates can wield, amplified by the extraordinary sums and resources they manage, it also does a great disservice to people who are entitled to a proper education which, clearly, they are not receiving in this monotheistic model.

It reminds me precisely of the so-called "religious education" I received in Ireland which was nothing of the sort. All I got was instruction in Catholic doctrine and ethics; there was no instruction in the beliefs of any other Christian sects, let alone what goes on in the other major world religions such as Hinduism, Judaism, or Islam. What I know about them I taught myself in later life.

It seems that the same shameful parochial narrowness, intellectual provincialism, and "one true religion" ethic prevails in British economic so-called "education". Intellectuals ought to be utterly ashamed to propagate such blinkered views. Anyone who has never heard of Keynes is culturally illiterate; that an economics student, in particular, has never heard of Keynes is a disgrace.

On another matter, the revelation that economists "ignore empirical evidence that contradicts mainstream theories" destroys any notion that economics is a science, a silly claim I have always opposed. All that it reveals is that economists have no idea what science is.

[Mar 28, 2017] Priests of neoliberal economics need to recognize that they operate in a political environment in which their work will be seized upon by financial oligarchy, and will have real influnce of justifing thier often destrcutive for the majoroity of population policies

Delong is a typical neoliberal stooge, not that different from Mankiw, or Summers
Note that the terms "neoliberalism", "neo-classical economics" and "financial oligarchy" were never used...
Notable quotes:
"... "DeLong's takeaway is that economists do need to recognize that they operate in a political environment (the sewers of Romulus) in which their work will be seized upon by interested groups, with real practical outcomes. " ..."
"... UE's conclusion is that mainstream economics needs to be taken down several notches, which would open more space for alternative approaches to economics and, indeed, alternative approaches to policy that place more weight on human outcomes, broadly understood, than the formalistic criteria of efficiency, etc. ..."
"... Simon-Wren Lewis (SWL) and Chris Dillow have both recently argued that criticising economics for the 2008 financial crisis distracts from the real source of the blame, which is banks, and therefore undermines the progressive cause. While I don't disagree that the banks deserve blame, I want to push back a bit on their argument that economics as a discipline has little to do with regressive ideas. ..."
"... Consider the case of monopoly. The economics textbooks may be against monopoly, but this is largely on the grounds that it reduces consumer welfare by increasing prices. Building on this logic, the Chicago School of anti-trust regulation has shifted the focus of anti-trust law to lowering prices for consumers. As this recent article on Amazon details, this has hidden other forms of monopoly abuse such as predatory pricing, market dominance and reduced bargaining power for workers, consumers and smaller companies. ..."
"... Or consider Reinhart and Rogoff's famous '90% debt threshold', where their statistics purportedly showed that after a country reaches 90% of sovereign debt, its growth would stall. This was used by many politicians, including George Osborne, to justify austerity - until it was revealed to be based on 'statistical errors'. Sure, R & R received a fair amount of flak for this, but they have been incredibly stubborn about the result. Where was the formal, institutional denunciation of such a glaring error from the economics profession, and of the politicians who used it to justify their regressive policies? Why are R & R still allowed to comment on the matter with even an ounce of credibility? The case for austerity undoubtedly didn't hinge on this research alone, but imagine if a politician cited faulty medical research to approve their policies - would institutions like the BMA not feel a responsibility to condemn it? (Answer: yes, even when the politician was in another country). ..."
"... There are many more examples like this, such as Andrei Shleifer, who despite being prosecuted for fraud in post-Soviet Russia was awarded the John Bates Clark medal, probably the second most prestigious prize in the discipline, was subsequently allowed to publish papers in respected journals about how well privatisation went in Russia, and was eventually bailed out of the case by his incredibly wealthy university to the tune of $26 million. This is not to mention the disastrous Russian privatisation as a whole and the role of certain economists/economic ideas in it. ..."
"... Even worse were the Chicago boys, who advised Augusto Pinochet's horrific economic policies (and no, they were not just humble advisors, they were knee deep in the absolute worst excesses of the regime.) Without any substantive ethical code and without procedures for weeding out corrupt, dishonest or discredited work, the profession creates an environment where people can act like this and get away with it, all under the banner of the intellectual credibility 'economics' seems to confer on people. ..."
"... Mainstream economists have used mathematics to hide ideology. ..."
"... They have cherry-picked mathematical constructions with highly restrictive, idealized properties and then wedged-in economic parameters to fit their purposes. That is the case with the neoclassical production function and with the Arrow-Debreu general equilibrium model. The objective was to "prove" that economies free from government control were "natural" and best. They have been sophists from their first emergence. ..."
"... Science is not capable of devising a theory that adequately explains all the human elements and serendipitous effects of an economy - and may never be capable. However, humans are capable of organizing a society according to their needs and wants. They do it on a corporate scale all the time. It isn't perfect but it works pretty well. ..."
"... Mainstream economists have fought against a managed economy because it would reduce the influence of themselves and their plutocrat sponsors. ..."
Mar 28, 2017 | economistsview.typepad.com
Peter K. -> pgl... March 27, 2017 at 07:25 AM
Peter Dorman:

"DeLong's takeaway is that economists do need to recognize that they operate in a political environment (the sewers of Romulus) in which their work will be seized upon by interested groups, with real practical outcomes. "

.... ... ...

Peter K. , March 27, 2017 at 07:20 AM
... ... ...

http://econospeak.blogspot.com/2017/03/economics-part-of-rot-part-of-treatment.html

SUNDAY, MARCH 26, 2017

Economics: Part of the Rot, Part of the Treatment, or Some of Each?

Is mainstream economics, with its false certitudes and ideological biases, one of the reasons for the dismal state of policy debate in countries like the UK and the US, or are its rigorous methods an important antidote to the ruling political foggery? That's being debated right now, live online.

Our starting point is a post on Unlearning Economics, dated March 5, which argues that the flaws of mainstream economics contribute to lousy policy on several fronts: downplaying the role of monopoly, cheerleading for the shareholder value imperative in the corporate world, knee-jerk support for trade agreements under the banner of comparative advantage, and regressive macroeconomic policy, among others. A particularly pointed paragraph brought up the Reinhart-Rogoff 90% affair and accused the economics profession of dereliction of duty by not taking action to rebuke the wrongdoers:

Where was the formal, institutional denunciation of such a glaring error from the economics profession, and of the politicians who used it to justify their regressive policies?

UE's conclusion is that mainstream economics needs to be taken down several notches, which would open more space for alternative approaches to economics and, indeed, alternative approaches to policy that place more weight on human outcomes, broadly understood, than the formalistic criteria of efficiency, etc.

Simon Wren-Lewis responded by arguing that UE has it exactly backwards. Restricting himself to UE's critique of macroeconomics, SWL says, yes, reactionary politicians have invoked "economics" to support austerity, but "real" economists for the most part have not gone along. True, there were a few, like Reinhart and Rogoff and those in the employ of the British financial sector ("City economists") who took a public stand against sensible Keynesian policies in the wake of the financial crisis, but they were a minority, and, in any case, what would you want to do about them? Economists, like professionals in any field, will disagree sometimes, and having a centralized agency to enforce a false consensus would ultimately work against progressives and dissenters, not for them. Let's put the blame where it really belongs, says SWL-on the politicians and pundits who have brushed aside decades of theoretical and empirical work to promulgate a reactionary, fact-free discourse on economic policy.

Yes-but, adds Brad DeLong. He largely agrees with SWL, but delves more deeply into the Reinhart-Rogoff affair. He shows that, even without the famed Excel glitch, a cursory look would reveal that R-R were trumpeting nonexistent results:

So the R-R claim that fiscal consolidation was necessary and urgent was unfounded from the get-go, and these two were both respected mainstream economists, so what can we infer? DeLong's takeaway is that economists do need to recognize that they operate in a political environment (the sewers of Romulus) in which their work will be seized upon by interested groups, with real practical outcomes. In this situation, the profession as a whole has a responsibility to assess high profile but dubious work. Although he isn't explicit, my reading is that DeLong wants some sort of professional quality control, but not institutionalized in the way UE seems to call for.

...

pgl -> Peter K.... , March 27, 2017 at 07:44 AM
Yep - try reading this portion:

"reactionary politicians have invoked "economics" to support austerity, but "real" economists for the most part have not gone along. True, there were a few, like Reinhart and Rogoff and those in the employ of the British financial sector ("City economists") who took a public stand against sensible Keynesian policies in the wake of the financial crisis, but they were a minority, and, in any case, what would you want to do about them? Economists, like professionals in any field, will disagree sometimes, and having a centralized agency to enforce a false consensus would ultimately work against progressives and dissenters, not for them. Let's put the blame where it really belongs, says SWL-on the politicians and pundits who have brushed aside decades of theoretical and empirical work to promulgate a reactionary, fact-free discourse on economic policy."

Peter K. , March 27, 2017 at 07:27 AM
https://medium.com/@UnlearningEcon/no-criticising-economics-is-not-regressive-43e114777429#.gihe5thlj

Unlearning EconomicsFollow
Mar 5

No, Criticising Economics is not Regressive

Simon-Wren Lewis (SWL) and Chris Dillow have both recently argued that criticising economics for the 2008 financial crisis distracts from the real source of the blame, which is banks, and therefore undermines the progressive cause. While I don't disagree that the banks deserve blame, I want to push back a bit on their argument that economics as a discipline has little to do with regressive ideas.

But firstly, it is my view that criticising economics needn't have an ideological motivation. Many critics, myself included, simply believe that neoclassical economics has severe shortcomings and that in order to understand the economic system properly we need better ideas. In many cases criticisms of neoclassical economics are so abstract that it's not even clear to me what the political implications of either side would be (e.g. the fact that Arrow-Debreu equilibrium might be unstable has no bearing on my view of whether capitalism itself is). I respect both SWL and Dillow immensely, but taken alone I consider this line of argument a rather feeble attempt to shut down an important scientific and philosophical debate.

Despite this, the point has some force to it: why devote so much intellectual effort to criticising economics when we could be devoting it to getting the big banks and other corporate wrongdoers? And here I think SWL and Dillow both paper over the extent to which economics has served those in power, as I will try to illustrate with a number of examples. To be clear, I'm not 'blaming' economists for all of these occurrences, but I do think the discipline seems to eschew responsibility for them, and that progressive economists have a blind spot when it comes to the practical consequences of their discipline.

Economics in Practice

I've always acknowledged that economists themselves are probably more progressive than they're usually given credit for. Nevertheless, the absence of things like power, exploitation, poverty, inequality, conflict, and disaster in most mainstream models - centred as they are around a norm of well-functioning markets, and focused on banal criteria like prices, output and efficiency - tends to anodise the subject matter. In practice, this vision of the economy detracts attention from important social issues and can even serve to conceal outright abuses. The result is that in practice, the influence of economics has often been more regressive than progressive.

Consider the case of monopoly. The economics textbooks may be against monopoly, but this is largely on the grounds that it reduces consumer welfare by increasing prices. Building on this logic, the Chicago School of anti-trust regulation has shifted the focus of anti-trust law to lowering prices for consumers. As this recent article on Amazon details, this has hidden other forms of monopoly abuse such as predatory pricing, market dominance and reduced bargaining power for workers, consumers and smaller companies.

Similarly, textbook ideas about profit maximisation and rational agents responding to incentives featured prominently in the promotion of shareholder value by Milton Friedman and other economists, which has been dominant over the past few decades and has been instrumental in increasing inequality and corporate short-termism. The potential macroeconomic impacts of corporate concentration have also been ignored by discipline until very recently - a consequence, perhaps, of the narrowing of particular subfields and the neglection of more critical systemic analysis (something similar could perhaps be said for the 2016 Prize in contract theory, though I am no expert in this area).

One type of institution which is dominated by economic ideas is central banks, yet many of their policies have had regressive elements. For instance, SWL praises economists at the Bank of England for implementing Quantitative Easing, but forgets that the Bank itself admitted that this has disproportionately benefited the wealthy. This problem goes even deeper: as J W Mason has argued, inflation targeting - a key central bank policy across the world - in practice results in workers' wages being kept down and their jobs being made more insecure in the name of combating inflation. In both cases what is painted as a relatively benign process - reducing interest rates and managing inflation, respectively - actually has quite serious social consequences, which generally aren't discussed in class or by policymakers.

In the realm of international trade, economists have been all too inclined to support trade deals - often quite vociferously - on the basis of simple ideas like comparative advantage, while ignoring (a) the actual details of the trade deals, which as Dean Baker frequently points out, tend to favour the rich and corporations and (b) their own more complex economic models, which as Dani Rodrik frequently points out, do imply that trade will harm some people while benefitting others. Uneven and unfair international trade has been a key element of the harm to workers over the past few decades, and was undoubtedly a factor in the election of Trump.

Global trade institutions like the IMF and World Bank have been dominated by economics since their inception, and using economics they inflicted massive pain through their free market 'structural adjustment' policies, which can only be described as regressive but which were fundamentally based on context-free neoclassical ideas about markets. True, these institutions may have softened somewhat in recent years, but that doesn't undo the harm they have caused. In fact, even their more recent 'bottom up' policies such as microcredit and Randomised Control Trials - both inspired by economic ideas - often seem to have benefited global and local elites at the expensive of the poorest. As Jamie Galbraith once noted in the context of the financial crisis, the discipline just has a blind spot for how ideas interact with power to produce unfair outcomes, sometimes taking the form of outright abuse and fraud. Which leads me nicely to my next argument.

Abusing Economics

Economists may complain that economic ideas have been misused by vested interests, and that this isn't their responsibility. But a huge problem with the discipline of economics is that it has virtually no institutional shields against mistakes and wrongdoing. Merton and Scholes won the biggest prize in the profession for their model of financial markets - which had become commonly adopted in options trading - in 1997. A year later those same economists required a hefty bailout when the use of their model was implicated in the collapse of the hedge fund Long-Term Capital Management, where they were both partners. Was the prize revoked? No. Were they discredited? No. Actually, even the model is still widely used, despite massively underestimating fat tails and therefore being implicated in a number of other financial crises, including 2008.

Or consider Reinhart and Rogoff's famous '90% debt threshold', where their statistics purportedly showed that after a country reaches 90% of sovereign debt, its growth would stall. This was used by many politicians, including George Osborne, to justify austerity - until it was revealed to be based on 'statistical errors'. Sure, R & R received a fair amount of flak for this, but they have been incredibly stubborn about the result. Where was the formal, institutional denunciation of such a glaring error from the economics profession, and of the politicians who used it to justify their regressive policies? Why are R & R still allowed to comment on the matter with even an ounce of credibility? The case for austerity undoubtedly didn't hinge on this research alone, but imagine if a politician cited faulty medical research to approve their policies - would institutions like the BMA not feel a responsibility to condemn it? (Answer: yes, even when the politician was in another country).

There are many more examples like this, such as Andrei Shleifer, who despite being prosecuted for fraud in post-Soviet Russia was awarded the John Bates Clark medal, probably the second most prestigious prize in the discipline, was subsequently allowed to publish papers in respected journals about how well privatisation went in Russia, and was eventually bailed out of the case by his incredibly wealthy university to the tune of $26 million. This is not to mention the disastrous Russian privatisation as a whole and the role of certain economists/economic ideas in it.

Even worse were the Chicago boys, who advised Augusto Pinochet's horrific economic policies (and no, they were not just humble advisors, they were knee deep in the absolute worst excesses of the regime.) Without any substantive ethical code and without procedures for weeding out corrupt, dishonest or discredited work, the profession creates an environment where people can act like this and get away with it, all under the banner of the intellectual credibility 'economics' seems to confer on people.

And this leads me to my last point, which is the rhetorical power that invoking 'economics' has in contemporary politics. 'You don't understand economics' is - rightly or wrongly - a common refrain of those attacking progressive policies such as Ed Miliband's proposed energy price freeze, the minimum wage, or fiscal expansion. As with the above abuses of economics, those such as SWL complain (perhaps correctly) that these are inaccurate representations of the field.

But these same economists then invoke 'economics' in a similar way to justify their own policies. In my opinion, this only reinforces the dominance of economics and narrows the debate, a process which is inherently regressive. The case against austerity does not depend on whether it is 'good economics', but on its human impact. Nor does the case for combating climate change depend on the present discounted value of future costs to GDP. Reclaiming political debate from the grip of economics will make the human side of politics more central, and so can only serve a progressive purpose.

Peter K. -> Peter K.... , March 27, 2017 at 07:29 AM
Think about how Republicans use "Science" and scientists fight back against their misuse. In recent decades Republicans have left the field and now "scientist" has become a bad word for them.

Same thing needs to happen with Economics.

RGC -> Peter K.... , March 27, 2017 at 09:25 AM
Mainstream economists have used mathematics to hide ideology.

They have cherry-picked mathematical constructions with highly restrictive, idealized properties and then wedged-in economic parameters to fit their purposes. That is the case with the neoclassical production function and with the Arrow-Debreu general equilibrium model. The objective was to "prove" that economies free from government control were "natural" and best. They have been sophists from their first emergence.

RGC -> RGC... , March 27, 2017 at 09:33 AM
Consider the Arrow-Debreu model:

In the 1950s, Arrow and others proved a theorem that, many economists believe, put a rigorous mathematical foundation beneath Adam Smith's idea of the invisible hand. The theorem shows -- in a highly abstract model -- that producers and consumers can match their desires perfectly, given a particular set of prices.

In this rarified atmosphere of "general equilibrium," economic activity might take place efficiently without any central coordination, simply as a result of people pursuing their self-interest.

It's an insight that economists have used to argue for de-unionization, globalization and financial deregulation, all in the name of removing various frictions or distortions that prevent markets from achieving the elusive equilibrium.

Yet the theorem trails a dense cloud of caveats, which Arrow himself recognized could be more important than the proof itself. For one, it worked only in a perfect world, far removed from the one humans actually inhabit.

Equilibrium is merely one of many conceivable states of that world; there's no particular reason to believe that the economy would naturally tend toward it. Beautiful as the math may be, actual experience suggests that its magical efficiency is purely theoretical, and a poor guide to reality.

Remarkably, academic macroeconomists have largely ignored these limitations, and continue to teach the general equilibrium model -- and more modern variants with same fatal weaknesses -- as a decent approximation of reality.

Economists routinely use the framework to form their views on everything from taxation to global trade -- portraying it as a value-free, scientific approach, when in fact it carries a hidden ideology that casts completely free markets as the ideal.

Thus, when markets break down, the solution inevitably entails removing barriers to their proper functioning: privatize healthcare, education or social security, keep working to free up trade, or make labor markets more "flexible."

Those prescriptions have all too often failed, as the 2008 financial crisis eloquently demonstrated. The result is widespread distrust of economic experts and rejection of globalization.

In his recent book "Economism: Bad Economics and the Rise of Inequality," James Kwak credits conservative think tanks funded by corporations and the wealthy for spreading the oversimplified belief in markets as wise machines for producing optimal social outcomes. He certainly has a point, yet such propaganda stemmed from an intellectual model that had been lurking at the center of economics all along -- and remains there now, still widely revered.

This perversion isn't Arrow's fault. He merely helped to prove a mathematical theorem, and was no blind advocate for markets. Indeed, he actually thought the theorem illustrated the limitations of capitalism, and he was prescient in understanding how economic inequality might come to impair the workings of democratic government.

Perhaps it would be best to use his own words: "In a system where virtually all resources are available for a price, economic power can be translated into political power by channels too obvious for mention. In a capitalist society, economic power is very unequally distributed, and hence democratic government is inevitably something of a sham."

https://www.bloomberg.com/view/articles/2017-03-09/the-misunderstanding-at-the-core-of-economics

RGC -> RGC... , March 27, 2017 at 09:47 AM
Note that neo-classical(mainstream) economists did NOT do what scientists do.

They did not observe phenomena and then try to construct a theory to explain the phenomena.

Rather, they constructed a theory that supported their ideology and then tried to argue that the theory was representative of the real world.

anne -> RGC... , March 27, 2017 at 02:55 PM
I do appreciate this essay.
Egmont Kakarot-Handtke , March 27, 2017 at 07:50 AM
The non-existence of economics

Comment on Simon Wren-Lewis on 'On criticizing the existence of mainstream economics'

There is no such thing as economics, there are FOUR economixes and they are constantly played against each other. First, there is theoretical and political economics. The crucial distinction within theoretical economics is true/false, the crucial distinction within political economics good/bad. Economics exhausts itself since 200+ years in crossover discussion, that is, by NOT keeping science and politics properly apart. As a result, it got neither science nor politics right.

Heterodox economists say that orthodox economics is false and in this very general sense they are right. Heterodox economists have debunked much of Orthodoxy but this has not enabled them to work out a superior alternative. The proper task of Heterodoxy is not the repetitive critique of Orthodoxy but to fully replace it, that is, to perform a paradigm shift: "The problem is not just to say that something might be wrong, but to replace it by something ― and that is not so easy." (Feynman)

Because Heterodoxy has never developed a valid alternative it advocates pluralism, more precisely, the pluralism of false theories. The argument boils down to: if Orthodoxy is allowed to sell their rubbish in the curriculum, Heterodoxy must also be allowed to sell their rubbish. Economics is not so much a heroic struggle about scientific truth but about a better place at the academic trough.

The fact of the matter is that neither Orthodoxy nor Heterodoxy has the true theory and that, by consequence, the political arguments of BOTH sides have NO sound scientific foundation.

Traditional Heterodoxy knows quite well that it has nothing to offer in the way of progressive science and therefore argues for dumping scientific standards altogether and to focus on politics pure and simple: "The case against austerity does not depend on whether it is 'good economics', but on its human impact. Nor does the case for combating climate change depend on the present discounted value of future costs to GDP. Reclaiming political debate from the grip of economics will make the human side of politics more central, and so can only serve a progressive purpose."

This is a good idea, economists should no longer pretend to do science but openly push their respective political agendas, after all, this is what they have actually done the past 200+ years. Neither Orthodoxy nor traditional Heterodoxy satisfies the scientific criteria of material and formal consistency. So, both, orthodox and heterodox economists have to get out of science because of incurable incompetence.

It was John Stuart Mill who told economists that they must decide themselves between science and politics: "A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision."

Both, orthodox and heterodox economists violate the principle of the separation of science and politics on a daily basis. Economics is what Feynman famously called cargo cult science and neither right wing nor left wing economic policy guidance has a sound scientific foundation since Adam Smith/Karl Marx. It is high time that economics frees itself from the corrupting grip of politics.

Egmont Kakarot-Handtke

RGC -> Egmont Kakarot-Handtke ... , March 27, 2017 at 11:33 AM
Science is not capable of devising a theory that adequately explains all the human elements and serendipitous effects of an economy - and may never be capable. However, humans are capable of organizing a society according to their needs and wants. They do it on a corporate scale all the time. It isn't perfect but it works pretty well.

Mainstream economists have fought against a managed economy because it would reduce the influence of themselves and their plutocrat sponsors.

Peter K. , March 27, 2017 at 08:22 AM
I like that Thoma is linking to Campbell who has some interesting blog posts, like in today's links:

http://douglaslcampbell.blogspot.com/2017/03/corporations-in-age-of-inequality.html

"The story of inequality they tell is also one which is essentially technology based (IT and outsourcing), as they find that inequality is almost entirely driven by changes in between firm inequality. They deserve credit for presenting an interesting set of facts.

However, while intriguing, I'm not yet totally convinced this is the key to understanding inequality. Macromon [sic] also had an excellent discussion of this research awhile back...

...

I took issue with this comment "Since 1980, income inequality has risen sharply in most developed economies". As my blog readers know, income inequality has not risen dramatically in Germany, France, Japan, or Sweden according to Alvaredo et al.. Thus, this comment threw me: "This means that the rising gap in pay between firms accounts for the large majority of the increase in income inequality in the United States. It also accounts for at least a substantial part in other countries, as research conducted in the UK, Germany, and Sweden demonstrates." Right, but the increases in inequality in Germany and Sweden have been quite minor relative to the US, and are also associated with changes in top marginal tax rates. So, between firm inequality isn't actually explaining much is what I'm hearing.

..."

Peter K. , March 27, 2017 at 08:22 AM
pgl -> Peter K....
Try this single line:

"the profession as a whole has a responsibility to assess high profile but dubious work."

As in that awful paper by Gerald Friedman. Peter Dorman ripped it. I ripped. And yes the Romers ripped it.

That is what economists are suppose to do. But you have whined about this for the last 14 months.

Reply Monday, March 27, 2017 at 07:47 AM

Yes it was a priority to demonize Friedman b/c he was coming from the left and was supposedly supporting Bernie Sanders. It was a way for the center-left to discredit Bernie Sanders and call him "unPresidential" and "unserious" as Hillary did.

Meawhile PGL continuously name-drops Mankiw as if he has a man crush on him.

[Mar 28, 2017] The neoliberals also have strong views on the kind of society they would like to create, but they prefer to hide it because very few people would vote for it

Notable quotes:
"... You don't need to look very far to see the neoliberal ideal; it is all around us: everything a commodity, including human beings; massive differentials in life chances; sweat shops for producers juxtaposed with unimaginable wealth for the owners of capital; everybody on their own, the rolling back of collective provision and no such thing as society. ..."
"... Instead, the neoliberals talk of freedom and choice, but in reality it is freedom for the few to exploit the many and the choice to take whatever crumbs are offered to you or starve. ..."
"... Agree, but it's not that they don't talk about it. The use mathematics as a way to underscore what is essentially an ideological position. It gives them an aura of objectivity, impartiality and scientific truth which, given their prepositions about utility maximization and unbounded growth, they frankly don't have. ..."
Mar 28, 2017 | discussion.theguardian.com
archeeros , 25 Oct 2013 3:50

Keynes viewed economics as a branch of philosophy. At its heart are two questions - What is the nature of man? and What sort of society should we create? The focus on mathematical models, based upon free-market theories, has long been a victory for ivory towers over reality. Sure, they have an important role to play, but when they are at the centre of what is taught at universities something has gone wrong.

SteveTen -> archeeros , 25 Oct 2013 5:57

The neoliberals also have strong views on the kind of society they would like to create, but they don't talk about it often, because very few people would vote for it.

You don't need to look very far to see the neoliberal ideal; it is all around us: everything a commodity, including human beings; massive differentials in life chances; sweat shops for producers juxtaposed with unimaginable wealth for the owners of capital; everybody on their own, the rolling back of collective provision and no such thing as society.

Instead, the neoliberals talk of freedom and choice, but in reality it is freedom for the few to exploit the many and the choice to take whatever crumbs are offered to you or starve.

Usignolo -> SteveTen , 25 Oct 2013 6:18

Agree, but it's not that they don't talk about it. The use mathematics as a way to underscore what is essentially an ideological position. It gives them an aura of objectivity, impartiality and scientific truth which, given their prepositions about utility maximization and unbounded growth, they frankly don't have.

[Mar 28, 2017] Mainstream economics, with its false certitudes and ideological biases, is one of the reasons for the dismal state of policy debate in countries like the UK and the US, sustaining the ruling neoliberals political foggery?

Notable quotes:
"... Few mainstream economists predicted the global financial crash of 2008 and academics have been accused of acting as cheerleaders for the often labyrinthine financial models behind the crisis. Now a growing band of university students are plotting a quiet revolution against orthodox free-market teaching, arguing that alternative ways of thinking have been pushed to the margins. ..."
"... Our starting point is a post on Unlearning Economics, dated March 5, which argues that the flaws of mainstream economics contribute to lousy policy on several fronts: downplaying the role of monopoly, cheerleading for the shareholder value imperative in the corporate world, knee-jerk support for trade agreements under the banner of comparative advantage, and regressive macroeconomic policy, among others. A particularly pointed paragraph brought up the Reinhart-Rogoff 90% affair and accused the economics profession of dereliction of duty by not taking action to rebuke the wrongdoers: ..."
"... Simon Wren-Lewis responded by arguing that UE has it exactly backwards. Restricting himself to UE's critique of macroeconomics, SWL says, yes, reactionary politicians have invoked "economics" to support austerity, but "real" economists for the most part have not gone along. True, there were a few, like Reinhart and Rogoff and those in the employ of the British financial sector ("City economists") who took a public stand against sensible Keynesian policies in the wake of the financial crisis, but they were a minority, and, in any case, what would you want to do about them? Economists, like professionals in any field, will disagree sometimes, and having a centralized agency to enforce a false consensus would ultimately work against progressives and dissenters, not for them. Let's put the blame where it really belongs, says SWL-on the politicians and pundits who have brushed aside decades of theoretical and empirical work to promulgate a reactionary, fact-free discourse on economic policy. ..."
Mar 28, 2017 | economistsview.typepad.com
JohnH -> Peter K.... March 27, 2017 at 06:51 PM

So true; "SWL has never addressed what is happening in the real world."

And that's the reason UK economics students revolted: "Few mainstream economists predicted the global financial crash of 2008 and academics have been accused of acting as cheerleaders for the often labyrinthine financial models behind the crisis. Now a growing band of university students are plotting a quiet revolution against orthodox free-market teaching, arguing that alternative ways of thinking have been pushed to the margins.

Economics undergraduates at the University of Manchester have formed the Post-Crash Economics Society, which they hope will be copied by universities across the country. The organisers criticise university courses for doing little to explain why economists failed to warn about the global financial crisis and for having too heavy a focus on training students for City jobs."
https://www.theguardian.com/business/2013/oct/24/students-post-crash-economics

pgl is a classic example. He regularly preaches what theory says but is clueless to explain what's really happening.

Peter K. , March 27, 2017 at 07:20 AM
I like Peter Dorman much, much better than PGL. He always has interesting things to say. Here he stays on topic, unlike PGL.

http://econospeak.blogspot.com/2017/03/economics-part-of-rot-part-of-treatment.html

SUNDAY, MARCH 26, 2017

Economics: Part of the Rot, Part of the Treatment, or Some of Each?

Is mainstream economics, with its false certitudes and ideological biases, one of the reasons for the dismal state of policy debate in countries like the UK and the US, or are its rigorous methods an important antidote to the ruling political foggery? That's being debated right now, live online.

Our starting point is a post on Unlearning Economics, dated March 5, which argues that the flaws of mainstream economics contribute to lousy policy on several fronts: downplaying the role of monopoly, cheerleading for the shareholder value imperative in the corporate world, knee-jerk support for trade agreements under the banner of comparative advantage, and regressive macroeconomic policy, among others. A particularly pointed paragraph brought up the Reinhart-Rogoff 90% affair and accused the economics profession of dereliction of duty by not taking action to rebuke the wrongdoers:

Where was the formal, institutional denunciation of such a glaring error from the economics profession, and of the politicians who used it to justify their regressive policies?

UE's conclusion is that mainstream economics needs to be taken down several notches, which would open more space for alternative approaches to economics and, indeed, alternative approaches to policy that place more weight on human outcomes, broadly understood, than the formalistic criteria of efficiency, etc.

Simon Wren-Lewis responded by arguing that UE has it exactly backwards. Restricting himself to UE's critique of macroeconomics, SWL says, yes, reactionary politicians have invoked "economics" to support austerity, but "real" economists for the most part have not gone along. True, there were a few, like Reinhart and Rogoff and those in the employ of the British financial sector ("City economists") who took a public stand against sensible Keynesian policies in the wake of the financial crisis, but they were a minority, and, in any case, what would you want to do about them? Economists, like professionals in any field, will disagree sometimes, and having a centralized agency to enforce a false consensus would ultimately work against progressives and dissenters, not for them. Let's put the blame where it really belongs, says SWL-on the politicians and pundits who have brushed aside decades of theoretical and empirical work to promulgate a reactionary, fact-free discourse on economic policy.

Yes-but, adds Brad DeLong. He largely agrees with SWL, but delves more deeply into the Reinhart-Rogoff affair. He shows that, even without the famed Excel glitch, a cursory look would reveal that R-R were trumpeting nonexistent results:

So the R-R claim that fiscal consolidation was necessary and urgent was unfounded from the get-go, and these two were both respected mainstream economists, so what can we infer? DeLong's takeaway is that economists do need to recognize that they operate in a political environment (the sewers of Romulus) in which their work will be seized upon by interested groups, with real practical outcomes. In this situation, the profession as a whole has a responsibility to assess high profile but dubious work. Although he isn't explicit, my reading is that DeLong wants some sort of professional quality control, but not institutionalized in the way UE seems to call for.

...

[Mar 28, 2017] Economics students aim to tear up free-market syllabus

Notable quotes:
"... It was an eye opener that Universities are teaching only the neo-liberal model as the core syllabus. This is not education but indoctrination. Fair play to the group then who were passionate about the need for change and realise that it is up to them to effect that change. Good luck to them, I hope that they are successful in re-claiming education as a means of furthering understanding through questioning prevailing orthodoxy. ..."
"... Good luck. You may need it. You will be surprised at how much opposition you encounter and how remorseless and relentless it is. Look up the book "Political economy now!", about the experience at the University of Sydney. ..."
"... Economics is so discredited a subject that even students who have barley started studying realise that - with a few exceptions like Stiglitz or Schiller - it is total fabricated bullshit paid for by people with enough money to benefit from the lies it spreads. ..."
"... One of the biggest lies ever told the free market, as its never ever been a reality. ..."
"... Economists, like scientists and the rest of us, are always employed by someone and therein lies the problem: the conflict between what we believe to be the truth and what we are paid to do (or teach) to keep our job. Many economists (like investors & politicians) knew the crash would burst at some point but only those who enjoyed a seat outside the system would benefit from its prediction. ..."
Oct 24, 2013 | www.theguardian.com
Few mainstream economists predicted the global financial crash of 2008 and academics have been accused of acting as cheerleaders for the often labyrinthine financial models behind the crisis. Now a growing band of university students are plotting a quiet revolution against orthodox free-market teaching, arguing that alternative ways of thinking have been pushed to the margins.

Economics undergraduates at the University of Manchester have formed the Post-Crash Economics Society , which they hope will be copied by universities across the country. The organisers criticise university courses for doing little to explain why economists failed to warn about the global financial crisis and for having too heavy a focus on training students for City jobs.

A growing number of top economists, such as Ha-Joon Chang, who teaches economics at Cambridge University, are backing the students.

Next month the society plans to publish a manifesto proposing sweeping reforms to the University of Manchester's curriculum, with the hope that other institutions will follow suit.

Joe Earle, a spokesman for the Post-Crash Economics Society and a final-year undergraduate, said academic departments were "ignoring the crisis" and that, by neglecting global developments and critics of the free market such as Keynes and Marx, the study of economics was "in danger of losing its broader relevance".

Chang, who is a reader in the political economy of development at Cambridge, said he agreed with the society's premise. The teaching of economics was increasingly confined to arcane mathematical models, he said. "Students are not even prepared for the commercial world. Few [students] know what is going on in China and how it influences the global economic situation. Even worse, I've met American students who have never heard of Keynes."

In June a network of young economics students, thinkers and writers set up Rethinking Economics , a campaign group to challenge what they say is the predominant narrative in the subject.

Earle said students across Britain were being taught neoclassical economics "as if it was the only theory".

He said: "It is given such a dominant position in our modules that many students aren't even aware that there are other distinct theories out there that question the assumptions, methodologies and conclusions of the economics we are taught."

Multiple-choice and maths questions dominate the first two years of economics degrees, which Earle said meant most students stayed away from modules that required reading and essay-writing, such as history of economic thought. "They think they just don't have the skills required for those sorts of modules and they don't want to jeopardise their degree," he said. "As a consequence, economics students never develop the faculties necessary to critically question, evaluate and compare economic theories, and enter the working world with a false belief about what economics is and a knowledge base limited to neoclassical theory."

In the decade before the 2008 crash, many economists dismissed warnings that property and stock markets were overvalued. They argued that markets were correctly pricing shares, property and exotic derivatives in line with economic models of behaviour. It was only when the US sub-prime mortgage market unravelled that banks realised a collective failure to spot the bubble had wrecked their finances.

In his 2010 documentary Inside Job, Charles Ferguson highlighted how US academics had produced hundreds of reports in support of the types of high-risk trading and debt-fuelled consumption that triggered the crash.

Some leading economists have criticised university economics teaching, among them Paul Krugman, a Nobel prize winner and professor at Princeton university who has attacked the complacency of economics education in the US.

In an article for the New York Times in 2009, Krugman wrote : "As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth."

Adam Posen, head of the Washington-based thinktank the Peterson Institute, said universities ignore empirical evidence that contradicts mainstream theories in favour of "overly technical nonsense".

City economists attacked Joseph Stiglitz, the former World Bank chief economist, and Olivier Blanchard, the current International Monetary Fund chief economist, when they criticised western governments for cutting investment in the wake of the crash.

A Manchester University spokeman said that, as at other university courses around the world, economics teaching at Manchester "focuses on mainstream approaches, reflecting the current state of the discipline". He added: "It is also important for students' career prospects that they have an effective grounding in the core elements of the subject.

"Many students at Manchester study economics in an interdisciplinary context alongside other social sciences, especially philosophy, politics and sociology. Such students gain knowledge of different kinds of approaches to examining social phenomena many modules taught by the department centre on the use of quantitative techniques. These could just as easily be deployed in mainstream or non-mainstream contexts." Since you're here

we've got a small favour to ask. More people are reading the Guardian than ever, but far fewer are paying for it. Advertising revenues across the media are falling fast. And unlike many news organisations, we haven't put up a paywall – we want to keep our journalism as open as we can . So you can see why we need to ask for your help. The Guardian's independent, investigative journalism takes a lot of time, money and hard work to produce. But we do it because we believe our perspective matters – because it might well be your perspective, too.

If everyone who reads our reporting, who likes it, helps to support it, our future would be much more secure.

SmashtheGates , 25 Oct 2013 00:07

Good luck to this group. They are on the right lines.

Post-Autistic Economics has been around for quite a while, now, and has developed into the World Economics Association. Take a look ...........

http://www.worldeconomicsassociation.org/ Reply Share

GreatGrandDad SmashtheGates , 25 Oct 2013 04:02
Good luck to this group. They are on the right lines.
Post-Autistic Economics has been around for quite a while....

and so has CASSE.

I hope these students can insist on For the Common Good (Daly and Cobb 1992) becoming a central text for their course.

The quotations from the 'grand-daddy' of Heterodox (as opposed to Orthodox) Economics, Kenneth Goulding,
will give them plenty of ammunition.

I particularly like: Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist. and
Economists are like computers. They need to have facts punched into them.

But my favourite is Mathematics brought rigor to Economics. Unfortunately, it also brought mortis.

littlepump SmashtheGates , 25 Oct 2013 09:42
@ SmashtheGates 25 October 2013 12:07am . Get cifFix for Firefox .

Good luck to this group. They are on the right lines.

Agreed, but they are fighting an uphill battle. Just look at how few (accademic) heterodox economists actually work in economics departments. I think almost every heterdox economist I know works in an non-economics school/faculty (i.e. schools/facultues of the environment, sustainability, sociology, land use etc).
GreatGrandDad Conrad33 , 25 Oct 2013 04:33
Again the Economists have their heads buried in stats rather than in the trenches.

Nice one, and a neat summary of what the economists had to tell the Queen in answer to her question as to why there was not forewarning of the crash.

Chrisk79 , 25 Oct 2013 00:36
I spoke with some of the Post Crash group at a Peoples Assembly meeting recently. It was an eye opener that Universities are teaching only the neo-liberal model as the core syllabus. This is not education but indoctrination. Fair play to the group then who were passionate about the need for change and realise that it is up to them to effect that change. Good luck to them, I hope that they are successful in re-claiming education as a means of furthering understanding through questioning prevailing orthodoxy.
hamstrung Chrisk79 , 25 Oct 2013 01:53
Well said that man. Very well said. Unquestioning indoctrination has led us (all countries in the world be they active participants or 'victims) to this sorry pass.

Basic economics should include the very basic idea that money is no more and no less than a tool. If you strip money / the tool away from folk then they will either try and take your tool from you or, if life becomes savage enough, they will fall by the wayside.

Does this generation and successive ones really want to walk over the bodies of others?

Without a profound readjustment and realignment of economic thinking, that is precisely what is in store. Indeed, it is what has been set in motion already. Time for an urgent re-think before more bodies litter the highways.

GreatGrandDad hamstrung , 25 Oct 2013 04:40
Time for an urgent re-think...

I heard recently about one man who had had such a re-think.

He was an American financial executive who was asked why he was taking early retirement and going off to live in a little valley in the hills.

He replied: "Well, it is a lovely property with great scenery, fertile land and its own microhydroelectricity-----but the really big attraction is that it puts 300 miles of armed hillbillies between me and the nearest city"!!.

callaspodeaspode GreatGrandDad , 25 Oct 2013 11:28
I do hope the chap in question doesn't end up regretting that he has deliberately placed himself into a situation where there are 300 miles of armed hillbillies between himself and the nearest city.

These things can cut both ways. Reply Share

GazInOz , 25 Oct 2013 02:27
Good luck. You may need it. You will be surprised at how much opposition you encounter and how remorseless and relentless it is. Look up the book "Political economy now!", about the experience at the University of Sydney.

http://purl.library.usyd.edu.au/sup/9781921364051

marukun GazInOz , 25 Oct 2013 05:22
Exactly - the clue is in this statement from the University authorities...

It is also important for students' career prospects that they have an effective grounding in the core elements of the subject.

Or in other words...

Students should be familar with the free market fair tales thrown up by rich, greedy bankers and the right wing in order to earn money pandering the "correct" line

Economics is so discredited a subject that even students who have barley started studying realise that - with a few exceptions like Stiglitz or Schiller - it is total fabricated bullshit paid for by people with enough money to benefit from the lies it spreads.

Paul Flanagan , 25 Oct 2013 02:34
One of the biggest lies ever told the free market, as its never ever been a reality.

Restrictions or prejudices ensure this, so such a philosophy deserves tearing up just like their supporters who believe community and care are bad ideals. They call it socialism but it is far from being a dirty word as it is about looking after all people on a more equal level, so as to ensure the most vulnerable people in society are not left in a helpless and hopeless position.

GreatGrandDad hamstrung , 25 Oct 2013 04:40
Time for an urgent re-think...

I heard recently about one man who had had such a re-think.
He was an American financial executive who was asked why he was taking early retirement and going off to live in a little valley in the hills.
He replied: "Well, it is a lovely property with great scenery, fertile land and its own microhydroelectricity-----but the really big attraction is that it puts 300 miles of armed hillbillies between me and the nearest city"!!.

Squiff811 , 25 Oct 2013 07:28
Thatcherist 'Reaganomics' was their response to the hissy fit Maggie threw at the 'grubby little terrorist' Nelson Mandela when he started to put the kibosh on the elites cash cow of South African apartheid, 4 decades of 'starving the beast' and media complicity in pushing the benefits of supply side while pruning demand to the core by cutting back public investment which is the only source of high velocity currency in a debt based economy where cash is simply printed to commission public gods, services and infrastructure for a civilised society and withdrawn through tax to mitigate inflation.

Only as we approach their ideology of fiscal apartheid do the courtiers perceive that without demand a bleak future awaits everyone but the very few already excessively wealthy.

Nicoise , 25 Oct 2013 07:41
Economists, like scientists and the rest of us, are always employed by someone and therein lies the problem: the conflict between what we believe to be the truth and what we are paid to do (or teach) to keep our job. Many economists (like investors & politicians) knew the crash would burst at some point but only those who enjoyed a seat outside the system would benefit from its prediction.

[Mar 28, 2017] normal use of resources = Normal rate of wage growth suppression

Mar 28, 2017 | economistsview.typepad.com

Paine -> Peter K.... , March 28, 2017 at 12:04 PM

"normal use of resources "

Translation

Normal rate of wage growth suppression

"Volatility" here means an asset market contraction

Yes the capitalist class needs to be protected from excessive policy induced capital loses !

Would that the fed were as concerned about lost potential wage gains

[Mar 28, 2017] Russia Is Pissed Threatens To Spill Obama Admin Secrets If US Intel Does not Stop Leaking

Another fake news. this time from Zero Hedge...
Mar 28, 2017 | www.zerohedge.com
Russia Is Pissed: Threatens To Spill Obama Admin Secrets If US Intel Doesn't Stop Leaking logical-different , Mar 28, 2017 5:56 PM

Here's what you have to do Russia

Tell the American government that they'll have to apply for a VISA before you'll them come into your country. Personally, I don't know why you'd want the bastards to come for a visit. If you think your confused now wait until the inmates from the USA finish with their visit.

Herdee , Mar 28, 2017 4:36 PM

Like how the CIA trained these F'n morons?

https://www.infowars.com/german-mp-erdogan-a-terrorism-godfather/

NobodyNowhere , Mar 28, 2017 3:59 PM

Obama was never a world-class leader - not even close. An arguably good speaker but not on topics of state, mostly on ethnic divide, cummunal politics - things that touch heart strings in disadvantaged sections of society (minorities, unemployed whites, etc).

As a politician he was pedantic (community level); as a statesman, zero.

Onan_the_Barbarian -> NobodyNowhere , Mar 28, 2017 4:55 PM

Google for "Obama without teleprompter". Not impressive.

nobodysfool , Mar 28, 2017 1:44 PM

It's all about Leverage...

Don Corleone : Good. Someday, and that day may never come, I'll call upon you to do a service for me. But until that day - accept this justice as a gift on my daughter's wedding day.

DirtySanchez , Mar 28, 2017 10:44 AM

Russia and others may be of help.

The entire world needs verifiable proof of the US war criminal behavior for the past 20+ years.

Prison sentences are not enough.

Former US Presidents need to face their accusers for the raping, pillaging, destruction, and murder of several soverign nations.

God help them.

dvfco -> DirtySanchez , Mar 28, 2017 2:21 PM

It's time they nailed everyone in the Obama Administration to the wall, then follow up with every Republican in a former Bush Administration who is a NeverTrump douche and handcuff them to one from Obama's group.

The only reason there are Republican - Never Trumpers is that they're terrified all their sins will surface.

Once Trump starts reaming Obama and Clinton, they'll turn on Bush, etc.

Gonna get fugly!

LawsofPhysics , Mar 28, 2017 10:32 AM

Ultimately there is no honor among theives...

esum , Mar 28, 2017 10:13 AM

Someone should shit or get off the pot with this Russian stuff... The REAL STORY IS SPYING ON US CITIZENS AND CONGRESS AND OBAMA'S USE OF CLASSIFIED INTEL AND COMEY BRENNAN CLAPPER CRIMES..... Lets get to it

MrBoompi , Mar 28, 2017 9:00 AM

There is nothing Russia could divulge that would come as a surprise to most of us here. At this point it would just be a confirmation of the highly corrupt and immoral behavior we've seen this government engage in for decades now. Besides, if we couldn't throw Bush and Cheney in the slammer after what they did, what hope would we have to hold Obama and Clinton accountable? Until further notice, this class of folks is above the law.

OCnStiggs , Mar 28, 2017 8:39 AM

The Progressive Liberal Democrats who have been staunch allies with the Russians for nearly 50 years have now turned on them to hide their own failure in running Hillary. Big mistake Mr. Schumer.

The Russians are looking out for Russia. They will uncork a plethora of very bad news for you, including all the private dealings Progressives have had with them ('ala Ted Kennedy asking Andropov to help screw Reagan during his last election) and the timing couldn't be better for the mid-term elections.

The Progressives are no friend of America and as the word gets out to mainstream America, the result will be devastating to the Democratic Party. Good. About time.

MORE INVESTIGATIONS OF DEMOCRATS!!!! FRY HILLARY!!!

Reaper , Mar 28, 2017 8:07 AM

Did Putin foolishly expect swine to be honorable?

d edwards -> Reaper , Mar 28, 2017 8:41 AM

I bet they do have Hillary's 30k missing emails.

goober -> d edwards , Mar 28, 2017 1:17 PM

Just like NSA always has and has never released any of it, why is that ? Do we actually have a legitimate government or simply a giant criminal enterprise control mechanism ? Here are the answers !

http://www.downtoearththinking.com/our-government-created-google-and-fac...

http://www.downtoearththinking.com/the-war-against-donald-trump-.html

The Russians have their own shit to keep secret and when that is less important and damaging then they will release the flood gates of hell on BHO and crew as well as Hillary and the Bushites. Not until, but I suspect that time is approaching or very near. The tangled web of sociopaths and psychopaths that control us, Hey ?

TheEndIsNear -> PleasedToMeatYou , Mar 28, 2017 8:07 PM

Most of the American population are so ignorant of the physical laws of nature that they prefer to believe what the government tells them to believe instead of straining their brains to exercise a little common sense. I think the disappearing 757 airliners at the Pentagon and Shanksville are the most blatant of the government lies since they require no knowledge of high-rise building construction. How people can ignore this kind of thing would be a mystery except that almost everyone gets their news from the TeeVee.

IranContra , Mar 28, 2017 7:08 AM

Fortunately, liberal thugs have not succeeded in derailing Trump-Putin cooperation, even in the most difficult areas: There is complete Russian-American military coordination in Iraq and Syria, even where Turkey and Iran disagree. Russia is allowing the US to arm the Kurds against ISIS in Syria, and Russia has asked Iran to withdraw its troops and militias from Iraq and Syria, exactly as Trump wants.

Not Too Important -> PleasedToMeatYou , Mar 28, 2017 1:35 PM

Russia can pull out of SWIFT any time they want. Europe depends on their gas. Russia can demand payment in rubles, too, or gold.

Europe's nuclear energy has already gone off a cliff, due to all the bad reactor parts from the French. That makes Russian energy much more valueable, and they don't have enough LNG receiving facilities to buy elsewhere in any significant amounts.

The only option now for the NWO is a quiet retirement, or mass global nuclear suicide. Any guesses?

nmewn , Mar 28, 2017 6:45 AM

"The US Department of State has more than once asked us not to announce planned visits until the last minute. This is not our tradition. We have been operating openly for years, but we have respected the requests we have received from our colleagues in Washington in the past few years . But what happened after that? First, the US Department of State asked us to keep the planned visit quiet and not to announce it until the last possible minute, until we coordinated the date. We did as they asked. But a day or two later the information was leaked by the US State Department and sometimes by the US administration. Frankly, this put Russia and the media in a strange situation, because they didn't know who to believe – the official agencies or the many leaks."

And as of this moment, the second quietest person in the room just happens to be...John Kerry.

Anybody seen ole horse face around lately? ;-)

fleur de lis -> NO QANA , Mar 28, 2017 10:15 AM

Russia must have a lot of info that they swept up over the years thanks to DC morons.

They relseased the recording of Icky Vicky Neudelmann because she instigated a war on their border.

But they must have picked up much more than that, thanks to her obnoxious ego.

Bastiat -> fleur de lis , Mar 28, 2017 3:20 PM

Remember when they released the crystal clear recording of Vicky Nuland organizing the Ukraine government? They must have been shocked at the utter indifference of supporters of the Obama regime.

[Mar 28, 2017] Outragious speaker fees at US universities events are a sign of corruption

Notable quotes:
"... $32K to hear Snooki speak at the Rutgers commencement? Are the administrators nuts? ..."
"... the Post and the legislator have certain attitudes, ideological biases if you will, towards public universities in general, and college students and the terms of their crushing college debt. ..."
"... And there was some thought that some elements in the legislature were perturbed that Rutgers did invite author Toni Morrison to speak at commencement, and did pay her $30,000 for it. And God knows what they payed Mr. Obama. ..."
"... Thank God they did not invite Hillary. ..."
"... For my son's Rutgers graduating class of 2014, the University had engaged Miss Condoleezza Rice, of Bush Administration State Department fame, to speak at that their commencement. For a $35,000 by the way. ..."
"... The professional class tends to defend the prerogatives of their own, sticking to their 'no consequences' principle for themselves and the acts of their peers, including the financiers. ..."
"... In the case of Secretary Rice, the students and faculty thought that it was hypocrisy to award an honorary law degree to someone who had consciously worked to circumvent the law, encouraged an aggressive war on contrived evidence, and helped permit the use of torture in violation of our nation's long standing principles. ..."
"... Rice signed off to give the CIA authority to conduct their torture tactics for gathering information from detainees as well. These are clearly human rights issues. By inviting her to speak and awarding her an honorary degree, we are encouraging and perpetuating a world that justifies torture and debases humanity ..."
"... I found it highly hypocritical of the Republican legislator and the arch-conservative Post to phrase their own stand against high commencement fees in such an incorrect manner, and dare I say false news . The Post and the politician knew better. They just did not give a damn in making their point. ..."
Mar 28, 2017 | jessescrossroadscafe.blogspot.com
From Jeri-Lynn Scofield over at Naked Capitalism who picked up this piece in the NY post:
Snooki inspires legislation to limit state university speaker fees NY Post. Moi: Speaking as a born and bred Jersey girl, I applaud the state legislature's action. Nice to see the state of my birth lead the way in something other than corruption or toxic waste. And about time– $32K to hear Snooki speak at the Rutgers commencement? Are the administrators nuts? And the proposed $10k cap is too high. Why should any speaker receive more than expenses and a modest honorarium, e.g., $1K– which incidentally, anyone with any class would immediately donate back to the university.
I don't normally read the Post, except perhaps for financial pieces by John Crudele, so I was glad to see this at a site where I do read on occasion.

This is no knock on Jeri-Lynn whose major point remains intact, that commencement fees may be far too generous.

And as an old fogey, it seems to me to be a correct sentiment about paying far too much money and attention to these reality tv stars, our current President notwithstanding.

Except that this even with Snooki never happened, at least not in the way that the NY Post and the state legislator Republican Assemblyman John DiMaio portray.

And I suspect strongly that they carelessly framed the story the way in which they did, because the Post and the legislator have certain attitudes, ideological biases if you will, towards public universities in general, and college students and the terms of their crushing college debt.

Miss Nicole Snooki Polizzi, of Jersey Shore fame, never spoke at the Rutgers commencement, or any commencement that I could find. And she was not paid any money by the University administration for anything. Period.

She was paid $32,000 for two evening's 'performances' of a reality show nature for student audiences by the student run entertainment committee, which is an autonomous organization controlled by students. They book over 140 events per year. While the University does collect the money which in this case amounted to roughly 90 cents per student from a pool of general fees at the very large New Brunswick campus.

In other words, Snooki, who back in 2011 apparently had a following amongst the younger set, was a hired entertainer engaged by the students themselves without active involvement of University officials. And unless we wish to try and legislate the entertainment which college students may employ with their own money, and not allow it to be an issue for student government, I don't think that the esteemed GOP legislator's and the Post's points apply.

Here is a contemperaneous article , in which the University set the record straight.

Rutgers University officials made no apologies today for Snooki's $32,000 appearance at a pair of student-run events on the Piscataway campus. The "Jersey Shore" reality TV star was invited and paid by students, who are allowed to select their own entertainment, a campus spokesman said.

"The students use funds designated for student programming. The university does not censor the speakers students choose to invite to campus," said E.J. Miranda, a Rutgers spokesman.

I remembered this incident quite well, because my number one son was a student there at the time, and I kidded him about it. He pretty much shrugged it off to the liberal arts and music school crowd over the other side of the river, himself being ensconced at the Livingston and Bush campuses for engineering, business and medical/pharmaceutical students.

And there was some thought that some elements in the legislature were perturbed that Rutgers did invite author Toni Morrison to speak at commencement, and did pay her $30,000 for it. And God knows what they payed Mr. Obama.

But it seemed snarky to attack that indirectly by throwing Snooki in, albeit falsely, thinking it played better with those who think that all public projects are foolish wastes of money, and students deserved all the bad fortune they may incur.

Thank God they did not invite Hillary. Those sort of stratospheric speaking fees are the domain of private enterprise, like the boys on Wall Street, who exercise their private judgement more precisely to get the most for their hard earned dollars. And as I recall they are also paid by the for-profit private education institutions, which have been generous with fees and sinecures for certain politicians, for example.

Let's face it. A certain amount of foolishness is a part and parcel of the coming of age rite that is a college education, or the period between high school and family life, for most participants Sowing a few wild oat when one is young is hardly an alien concept.

As I recall, I spent a huge sum on foolishness in my college career. I was a commuting student who worked as an auto mechanic three or four days a week throughout. But I hate to see what my total beer tab amounted to during that four year period.

I seem to recall consuming rather heroic volumes of beer at the school student 'mixers, and local college beer dives, with quaint names like The Downunder, Agora, and Rathskeller while in pursuit of good times and companionship of the female persuasion.

For my son's Rutgers graduating class of 2014, the University had engaged Miss Condoleezza Rice, of Bush Administration State Department fame, to speak at that their commencement. For a $35,000 by the way.

But I was grateful to be spared sitting through that on a hot day because of widespread objections to her honorarium from the University community, both faculty and students. And the faculty involvement in this was notable. And it angered our NJ Republican politicians, very much.

It also disappointed Barack Obama , by the way, who in his own subsequent commencement address to take the students to task at a later commencement address but that is another story. The professional class tends to defend the prerogatives of their own, sticking to their 'no consequences' principle for themselves and the acts of their peers, including the financiers.

And granting our betters public venues where the common people are forced to listen, but not allowed to answer back, is hardly an open sharing of ideas. I think the political parities had a close and personal organizational experience that in the recent elections.

A one-way commencement address is one thing, a debate with various viewpoints is quite another. And so the University community did what people in a weaker position always tend to do when confronted with the unspeakable- they protested against it. And far too often, protests against what the public views as outrages are crushed. That is what happened to Occupy Wall Street.

And now the out of power liberal establishment asks, why are so few protesting? Duh.

In the case of Secretary Rice, the students and faculty thought that it was hypocrisy to award an honorary law degree to someone who had consciously worked to circumvent the law, encouraged an aggressive war on contrived evidence, and helped permit the use of torture in violation of our nation's long standing principles. Condoleezza Rice Declines to Speak at Rutgers after Student Protests.

" Rice signed off to give the CIA authority to conduct their torture tactics for gathering information from detainees as well. These are clearly human rights issues. By inviting her to speak and awarding her an honorary degree, we are encouraging and perpetuating a world that justifies torture and debases humanity ."
I found it highly hypocritical of the Republican legislator and the arch-conservative Post to phrase their own stand against high commencement fees in such an incorrect manner, and dare I say false news . The Post and the politician knew better. They just did not give a damn in making their point.

And it also fits their own political bias against public works, like Universities, and any thought of relief for students who are being crushed by debt at rates significantly higher than their parents just provided to Wall Street to bail those contemptible jokers out.

[Mar 28, 2017] This corrupt neoliberal stooge Brad DeLong and conversion of university economics departments into neoliberal propaganda departments

Notable quotes:
"... Lately certain unrepentant members of that disgraced profession, some of whom claim to be the consciences of the liberal establishment, have been expressing concern about the disrepute of the 'experts' and the need to allow the technocrats to take control of policy and the economy. ..."
"... Brad DeLong, by the way, banned me from his site comments noting, 'Alan Greenspan never made a decision with which I disagreed.' Since then even Alan Greenspan has admitted he does not agree with some of his decisions, in a sniveling and sneaky kind of a non-apologetic way. ..."
"... But the specific factual point from Brad's piece that got me going was this: ..."
"... "Merton and Scholes's financial math was correct, and the crash of their hedge fund did not require any public-money bailout" ..."
"... I think it is less than trivial to know where and how the B-S risk model fails as math, as illustrated so well by Benoit Mandelbrot in his book The Misbehaviour of Markets. The math fails in its selection choice of variables and assumptions. Naseem Taleb has made a cottage industry and a personal fortune understanding this error. ..."
jessescrossroadscafe.blogspot.com
Moving along, 'liberal' economist Brad DeLong of the University of California at Berkeley history of economics penned a recent column cited over at the excellent Economist's View run by Mark Thoma. The title of Brad's column is The Need for a Reformation of Authority and Hierarchy Among Economists in the Public Sphere.

Ok I have to admit that the title alone got me into a cranky mood. Lately certain unrepentant members of that disgraced profession, some of whom claim to be the consciences of the liberal establishment, have been expressing concern about the disrepute of the 'experts' and the need to allow the technocrats to take control of policy and the economy.

Granted, they may look like the lesser of two evils in some cases, as in the current nascent administration, and in their own minds. But their policy consensus and economic recommendations of the past thirty years or so, starting with the Fed chairmanship of Alan Greenspan at least, only look good in their own selective memories. Brad DeLong, by the way, banned me from his site comments noting, 'Alan Greenspan never made a decision with which I disagreed.' Since then even Alan Greenspan has admitted he does not agree with some of his decisions, in a sniveling and sneaky kind of a non-apologetic way.

For everyone else this cycle of growing inequality, policy skews to the wealthy few, and asset bubbles and bust that serve as wealth transfer mechanisms has been particularly trying.

But the specific factual point from Brad's piece that got me going was this:

"Merton and Scholes's financial math was correct, and the crash of their hedge fund did not require any public-money bailout"
Yeah, right. Let's put aside the nicety of a Fed brokered bailout of LTCM by Wall Street money as technically not requiring public bailout money, in order to save the financial system from an epic overleveraged mispricing of risk based on that correct math.

I think it is less than trivial to know where and how the B-S risk model fails as math, as illustrated so well by Benoit Mandelbrot in his book The Misbehaviour of Markets. The math fails in its selection choice of variables and assumptions. Naseem Taleb has made a cottage industry and a personal fortune understanding this error.

And what makes it most egregious is that the error hs been known among those with mathematical minds for some time. I myself read Mandelbrot's book in 2001 and said, 'holy shit.'

Let's be clear. This was not some dumb error on the part of these fellows, or some sneaky trick. They could not resolve their math without making a certain assumption, and they did it openly and consciously. And as the write of the essay below notes, there has not been anything better produced yet to his knowledge.

It is not the theory itself that is 'bad.' It is the use and misuse to which it is put by opportunists and financial predators in misrepresenting it.

But the people who use the assumptions on risk contained in the model don't care. Like the efficient market hypothesis, it is an intellectual fig leaf that covers an epic era of looting and plundering bases on what is essentially a con game. If you assume that risk is a rare event, you can persuade the regulators and the very important people to let you run on leverage at extreme levels, especially if you can use other people's money.

Like some of the other accepted truths from the turn of the century greed is good crowd, it is a meme with which to silence the protests and permit the widespread mispricing of risk in order to reap enormous short term profits for a very few wealthy insiders. This had been going on for so long that it is almost accepted as a normal way of doing business.

Here is what an essay in Criticality had to say about the Merton-Scholes math. I suppose that the sophist would say that the math was indeed right. It was just the assumptions they used to construct the model was wrong. So 3+5 does equal 8. Its just that in the real world case there were three more factors that were tossed aside and ignored because they messed up the path to the more easily determined and reassuring result.

"This implies that rather than extreme market moves being so unlikely that they make little contribution to the overall evolution, they instead come to have a very significant contribution. In a normally distributed market, crashes and booms are vanishingly rare, in a pareto-levy one crashes occur and are a significant component of the final outcome.

It has taken years for this to be taken seriously, and in the mean time financial theory has gone on using the assumption of normally distributed returns to derive such results as the Black-Scholes option pricing equation, ultimately winning an Nobel Prize in Economics for the discoverers Scholes and Merton (Black having already died), not to mention Modern Portfolio theory (also winning Nobels). That modern finance ignored Mandelbrot's discovery and went onto honor those working under assumptions shown to be false has clearly annoyed Mandelbrot immensely and as mentioned previously he spends much of the book telling us of his prior discoveries and how he was ignored.

It is like allowing tobacco companies to widely distribute their products while a bevy of hired gun experts and media pundits and PR organizations promote the theory that tobacco is not a highly addictive substance that causes a wide range of debilitating diseases, including cancer. They know damn well that it is and it does, but they do not give a damn as long as the money is rolling in. And pity the fool who tries to stand up and tell the truth.

And so to has it been with the Banks. Indeed, the PR campaign and political donations they handled through their intermediaries during the 1990s to deregulate and overturn Glass-Steagal has to be one of the great propaganda accomplishments of the twentieth century. And the follow on campaign for the US to invade Iraq in retribution for 9/11 is not far behind it for the twenty first.

The greater point is not that the B-S model is based on faulty assumptions that greatly diminish the potential risks. Rather it is how such 'laws' of economics are so often of a dodgy, optionated and theoretical nature such that taking them as a given in forming public policy is a huge mistake in judgement.

Why? Because they may embody assumptions about what is true, and what is a priority, and what our principles and objectives may be, and propagate those assumptions (biases) into a general policy of our society that ends up causing great harm to many innocent participants. Indeed, as Obama said, there is a great need to discussion and understanding. It is just that it cannot be monopolized by a particular group of insiders who adhere to certain assumptions and professional courtesies of their own, dare I say it, class.

So there are my two corrections to the mainstream media and their writing of the public record- to suit themselves and their wealthy patrons. It seems like modern America spends an enormous amount of its intellectual capital and time on finding ways to scam the public. If we could somehow reorder the paybacks on financial corruption to even a third of what it is today we could probably cure cancer in five years or less. That is what it would take to 'make America great again,' for real and not just in the funny papers.

I would like to again stress that I am not finding fault with either of the two bloggers involved, both of whom I enjoy and admire for what they do. Mark Thoma is a class act, and even when he disagrees is very fair and open minded about it. And he keeps this site in his blogroll despite some special interests who have argued for its removal. That is more than I can say for some others.

Rather, I am trying to correct a couple of things from the broader media that seem to be factually wrong, purposely, and further, to help caution the reader that things that appear in the mainstream media written by bona fide members of the certified and qualified professional establishment cannot always be taken at face value.

The deterioration of the quality of the news is startling. I think it has a lot to do with the takeover of the media by a relatively few number of large corporations (thank you Slick Willy) Yeah, there is a lot of nutty stuff on the internet and in blogs. I spend a lot of time assessing it and avoiding it where I can. But to say that the mainstream is somehow authoritative, objective and pure is self-serving baloney at best, and a thin veneer for official propaganda when it serves the purpose at worst.

[Mar 28, 2017] Staying Rich Without Manufacturing Will Be Hard

Notable quotes:
"... What's more, the overall numbers hide serious declines in most areas of manufacturing. A 2013 paper by Susan Houseman, Timothy Bartik and Timothy Sturgeon found that strong growth in computer-related manufacturing obscured a decline in almost all other areas. "In most of manufacturing," they write, "real GDP growth has been weak or negative and productivity growth modest." ..."
"... And, more troubling, the U.S. is now losing computer manufacturing. Houseman et al. show that U.S. computer production began to fall during the Great Recession. In semiconductors, output has grown slightly, but has been far outpaced by most East Asian countries. Meanwhile, trade deficits in these areas have been climbing. ..."
"... He cites Sematech, a government-led consortium that tried to help the U.S. retain its lead in semiconductor manufacturing in the 1980s and 1990s, as a successful example of high-tech industrial policy. ..."
Mar 28, 2017 | economistsview.typepad.com
Peter K. , March 28, 2017 at 10:23 AM
https://www.bloomberg.com/view/articles/2017-03-28/staying-rich-without-manufacturing-will-be-hard

ECONOMICS

Staying Rich Without Manufacturing Will Be Hard
MARCH 28, 2017 8:00 AM EDT

Discussions about manufacturing tend to get very contentious. Many economists and commentators believe that there's nothing inherently special about making things and that efforts to restore U.S. manufacturing to its former glory reek of industrial policy, protectionism, mercantilism and antiquated thinking.

But in their eagerness to guard against the return of these ideas, manufacturing's detractors often overstate their case. Manufacturing is in bigger trouble than the conventional wisdom would have you believe.

One common assertion is that while manufacturing jobs have declined, output has actually risen. But this piece of conventional wisdom is now outdated. U.S. manufacturing output is almost exactly the same as it was just before the financial crisis of 2008:

[chart]

In the 1990s, it really was true that manufacturing production was booming even though employment in the sector was falling. During that decade, output rose by almost half. That's almost a 4 percent annualized growth rate. The expansion of the early 2000s, in contrast, saw manufacturing increase by only about 15 percent peak-to-peak over eight years -- less than a 2 percent annual growth rate. And in the eight years between 2008 and 2016, the growth rate has averaged zero.

But even this may overstate U.S. manufacturing's performance. An alternative measure, called industrial production, shows an outright decrease from a decade ago:

[chart]

So it isn't just manufacturing employment and the sector's share of gross domestic product that are hurting in the U.S. It's total output. The U.S. doesn't really make more stuff than it used to.

What's more, the overall numbers hide serious declines in most areas of manufacturing. A 2013 paper by Susan Houseman, Timothy Bartik and Timothy Sturgeon found that strong growth in computer-related manufacturing obscured a decline in almost all other areas. "In most of manufacturing," they write, "real GDP growth has been weak or negative and productivity growth modest."

And, more troubling, the U.S. is now losing computer manufacturing. Houseman et al. show that U.S. computer production began to fall during the Great Recession. In semiconductors, output has grown slightly, but has been far outpaced by most East Asian countries. Meanwhile, trade deficits in these areas have been climbing.

In other words, Asia is still solidifying its place as the workshop of the world, while the U.S. de-industrializes. The 1990s provided a brief respite from this trend, as new industries arose to replace the ones that had been lost. But the years since the turn of the century have reversed this short renaissance, and manufacturing is once more migrating overseas.

Manufacturing skeptics often draw parallels to what happened to agriculture in the Industrial Revolution. But the two situations aren't analogous. In the 20th century, U.S. agricultural output soared even as it shed jobs and shrank as a percent of GDP. Machines replaced most human farmers, but the total value of U.S. crops kept climbing.

Meanwhile, the U.S. to this day runs a trade surplus in agriculture even as it runs a huge deficit in manufactured products. America pays for computers and cars and phones with soybeans and corn and beef.

So U.S. manufacturing is hurting in ways that U.S. agriculture never did. The common refrain that the modern shift to services parallels the earlier shift to industry might turn out to be true, but the parallels are not encouraging.

Faced with this evidence, many skeptics will question why the sector is important at all. Why should a country specialize in making things, when it can instead specialize in designing, marketing and financing the making of things?

This is a legitimate question, but there are reasons to think a successful developed nation still needs a healthy manufacturing sector. Harvard University's Kennedy School of Government economist Ricardo Hausmann believes that a country's economic development depends crucially on where it lies in the so-called product space. If a country makes complex products that are linked to many other industries -- such as computers, cars and chemicals -- it will be rich. But if it makes simple products that don't have much of a supply chain -- soybeans or oil -- it will stay poor. In the past, the U.S. was very successful at positioning itself at the top of the global value chain. But with manufacturing's decline, the rise of finance, real estate and other orphaned service industries may not be enough to keep the country rich in the long run.

More top economists are starting to come around to the view that manufacturing is important. Massachusetts Institute of Technology economist David Autor, in a recent phone conversation, told me he now believes that the U.S. should focus more on industrial policy designed to keep cutting-edge manufacturing industries in the country. He cites Sematech, a government-led consortium that tried to help the U.S. retain its lead in semiconductor manufacturing in the 1980s and 1990s, as a successful example of high-tech industrial policy.

The stellar performance of semiconductor manufacturing in the 1990s and 2000s relative to other industries in the sector, as reported by Houseman et al., seems like something the U.S. should aim to emulate with next-generation industries.

So U.S. leaders should listen to manufacturing skeptics a little bit less, and pay more attention to those who say the sector is crucial. It's worth noting that President Donald Trump, who was elected on a promise to restore American manufacturing, has shown more interest in cutting government programs designed to give industry a helping hand. If there's going to be a U.S. industrial policy renaissance, it might not be his administration that leads it.

Paine -> Peter K.... , March 28, 2017 at 01:17 PM
The Larry summers fantasy

Large creative and scientific communities located here in the global hub. Can provide vast IP income

And there's lays good old fashion capital

Not to mention direct Yankee expropriating gainful investment in comparatively cheap foreign resources and labor


Not to mention direct Yankee expropriatingly gainful investment
in comparatively cheap
foreign resources and labor

[Mar 28, 2017] Somebody did well with the Obama health plan:

Mar 28, 2017 | economistsview.typepad.com
Tom aka Rusty, March 27, 2017 at 10:28 AM
Somebody did well with the Obama health plan:

http://www.beckershospitalreview.com/healthcare-information-technology/epic-systems-judy-faulkner-makes-forbes-billionaires-list-2017.html

Faulkner was appointed to the committee that wrote the EMR standards, and not surprisingly EPIC was the template for the standards.

Much cost and misery inflicted on providers.

[Mar 28, 2017] Its hardly surprising were such an unproductive - fiancialised and individualised nation is it? Nor is it surprising that London generally flourishes as one of the most financialised and individualised cities in the world

Mar 28, 2017 | discussion.theguardian.com
NottinghamFlorist , 25 Oct 2013 5:10 The 'free' market is as follows...

UK lending by financial institutions, 1997-2012:

36%-40% going to "financial institutions"
51%-52% going to "individuals", i.e. mostly "rich individuals"
5%-9% going to "manufacturing/productive industry".

It's hardly surprising we're such an unproductive - fiancialised and individualised nation is it? Nor is it surprising that London generally "flourishes" as one of the most financialised and individualised cities in the world.

This isn't 'freedom'. It's reaping what we have sowed for the last thirty plus years of neoliberal politics and economics. It's as centrally planned as anything under the Soviet Union, only with capitalist distribution, i.e. it is pure state capitalism, or engineered capitalism, and yet they tell us society cannot be 'engineered', or 'structured', and that this is utopian dreaming. They are the utopian dreamers.

London is the financial arm of the Washington consensus - a part of the EU, and a part of the UK, but barely so - or semi-detached. The City of London from which all financial capital flows is effectively a tax haven, no different to the Channel Islands. It's all a huge political and social mess - exactly what the economic elite want.

[Mar 28, 2017] The fact is that the mainstream economists, and most mainstream economists who were heard in the public sphere were not against austerity, but rather split, with, if anything, louder and larger voices on the pro-austerity side

Brad DeJong is staunch despicable neoliberal, but something he has the courage to admit obvious things...
Notable quotes:
"... Simon needs to face that fact squarely, rather than to dodge it. The fact is that the "mainstream economists, and most mainstream economists" who were heard in the public sphere were not against austerity, but rather split, with, if anything, louder and larger voices on the pro-austerity side. ..."
"... When Unlearning Economics seeks the destruction of "mainstream economics", he seeks the end of an intellectual hegemony that gives Reinhart and Rogoff's very shaky arguments a much more powerful institutional intellectual voice by virtue of their authors' tenured posts at Harvard than the arguments in fact deserve. ..."
Mar 28, 2017 | economistsview.typepad.com

anne, March 27, 2017 at 11:08 AM

http://www.bradford-delong.com/2017/03/the-need-for-a-reformation-of-authority-and-hierarchy-among-economists-in-the-public-sphere.html

March 27, 2017

... ... ...

and then there is Reinhart and Rogoff, where I think Unlearning Economics is right.

So Unlearning Economics is batting 0.170 in their examples of "mainstream economics considered harmful". But there is that one case. And I do not think that Simon Wren-Lewis handles that one case well. And he needs to--I need to. And, since neither he nor I have, this is a big problem.

Let me put it this way: Carmen Reinhart and Ken Rogoff are mainstream economists.

The fact is that Carmen Reinhart and Ken Rogoff were wrong in 2009-2013. Yet they had much more influence on economic policy in 2009-2013 than did Simon Wren-Lewis and me. They had influence. And their influence was aggressively pro-austerity. And their influence almost entirely destructive.

Simon needs to face that fact squarely, rather than to dodge it. The fact is that the "mainstream economists, and most mainstream economists" who were heard in the public sphere were not against austerity, but rather split, with, if anything, louder and larger voices on the pro-austerity side. (In my humble opinion, Simon Wren-Lewis half admits this with his denunciations of "City economists".)

When Unlearning Economics seeks the destruction of "mainstream economics", he seeks the end of an intellectual hegemony that gives Reinhart and Rogoff's very shaky arguments a much more powerful institutional intellectual voice by virtue of their authors' tenured posts at Harvard than the arguments in fact deserve.

Simon Wren-Lewis, in response, wants to claim that strengthening the "mainstream" would somehow diminish the influence of future Reinharts and Rogoffs in analogous situations. But the arguments for austerity that turned out to be powerful and persuasive in the public sphere came from inside the house!

* https://mainly macro.blogspot.co.uk/2017/03/on-criticising-existence-of-mainstream.html

** https://medium.com/@UnlearningEcon/no-criticising-economics-is-not-regressive-43e114777429#.ptzhjr87b

-- Brad DeLong

There are no gains from trade liberalization - just ask the people of Youngstown , March 27, 2017 at 03:31 PM
American economists bear much of the blame for the collapse of US living standards.

After fifty years of real economic decline, they prattle on about the benefits of trade liberalization.

[Mar 28, 2017] Foundation - Fall Of The American Galactic Empire Zero Hedge

Mar 28, 2017 | www.zerohedge.com
Mar 27, 2017 10:40 PM Authored by Jim Quinn via The Burning Platform blog,

"The fall of Empire, gentlemen, is a massive thing, however, and not easily fought. It is dictated by a rising bureaucracy, a receding initiative, a freezing of caste, a damming of curiosity-a hundred other factors. It has been going on, as I have said, for centuries, and it is too majestic and massive a movement to stop." – Isaac Asimov, Foundation

"Any fool can tell a crisis when it arrives. The real service to the state is to detect it in embryo." – Isaac Asimov, Foundation

I read Isaac Asimov's renowned award winning science fiction trilogy four decades ago as a teenager. I read them because I liked science fiction novels, not because I was trying to understand the correlation to the fall of the Roman Empire. The books that came to be called the Foundation Trilogy (Foundation, Foundation and Empire, and Second Foundation) were not written as novels; they're the collected Foundation stories Asimov wrote between 1941 and 1950. He wrote these stories during the final stages of our last Fourth Turning Crisis and the beginning stages of the next High. This was the same time frame in which Tolkien wrote the Lord of the Rings Trilogy and Orwell wrote 1984 . This was not a coincidence.

The tone of foreboding, danger, dread, and impending doom, along with unending warfare, propels all of these novels because they were all written during the bloodiest and most perilous portion of the last Fourth Turning . As the linear thinking establishment continues to be blindsided by the continued deterioration of the economic, political, social, and cultural conditions in the world, we have entered the most treacherous phase of our present Fourth Turning .

That ominous mood engulfing the world is not a new dynamic, but a cyclical event arriving every 80 or so years. Eight decades ago the world was on the verge of a world war which would kill 65 million people. Eight decades prior to 1937 the country was on the verge of a Civil War which would kill almost 5% of the male population. Eight decades prior to 1857 the American Revolution had just begun and would last six more bloody years. None of this is a coincidence. The generational configuration repeats itself every eighty years, driving the mood change which leads to revolutionary change and the destruction of the existing social order.

Isaac Asimov certainly didn't foresee his Foundation stories representing the decline of an American Empire that didn't yet exist. The work that inspired Asimov was Edward Gibbon's multi-volume series, The Decline and Fall of the Roman Empire , published between 1776 and 1789. Gibbon saw Rome's fall not as a consequence of specific, dramatic events, but as the result of the gradual decline of civic virtue, monetary debasement and rise of Christianity, which made the Romans less vested in worldly affairs.

Gibbon's tome reflects the same generational theory espoused by Strauss and Howe in The Fourth Turning . Gibbon's conclusion was human nature never changes, and mankind's penchant for division, amplified by environmental and cultural differences, is what governs the cyclical nature of history. Gibbon constructs a narrative spanning centuries as events unfold and emperors' successes and failures occur within the context of a relentless decline of empire. The specific events and behaviors of individual emperors were inconsequential within the larger framework and pattern of historical decline. History plods relentlessly onward, driven by the law of large numbers.

Asimov described his inspiration for the novels:

"I wanted to consider essentially the science of psychohistory, something I made up myself. It was, in a sense, the struggle between free will and determinism. On the other hand, I wanted to do a story on the analogy of The Decline and Fall of the Roman Empire, but on the much larger scale of the galaxy. To do that, I took over the aura of the Roman Empire and wrote it very large. The social system, then, is very much like the Roman imperial system, but that was just my skeleton.

It seemed to me that if we did have a galactic empire, there would be so many human beings-quintillions of them-that perhaps you might be able to predict very accurately how societies would behave, even though you couldn't predict how individuals composing those societies would behave. So, against the background of the Roman Empire written large, I invented the science of psychohistory. Throughout the entire trilogy, then, there are the opposing forces of individual desire and that dead hand of social inevitability."

Is History Pre-Determined?

"Don't you see? It's Galaxy-wide. It's a worship of the past. It's a deterioration – a stagnation!" – Isaac Asimov, Foundation

"It has been my philosophy of life that difficulties vanish when faced boldly." – Isaac Asimov, Foundation

The Foundation trilogy opens on Trantor, the capital of the 12,000-year-old Galactic Empire. Though the empire appears stable and powerful, it is slowly decaying in ways that parallel the decline of the Western Roman Empire. Hari Seldon, a mathematician and psychologist, has developed psychohistory, a new field of science that equates all possibilities in large societies to mathematics, allowing for the prediction of future events.

Psychohistory is a blend of crowd psychology and high-level math. An able psychohistorian can predict the long-term aggregate behavior of billions of people many years in the future. However, it only works with large groups. Psychohistory is almost useless for predicting the behavior of an individual. Also, it's no good if the group being analyzed is aware it's being analyzed - because if it's aware, the group changes its behavior.

Using psychohistory, Seldon has discovered the declining nature of the Empire, angering the aristocratic rulers of the Empire. The rulers consider Seldon's views and statements treasonous, and he is arrested. Seldon is tried by the state and defends his beliefs, explaining his theory the Empire will collapse in 300 years and enter a 30,000-year dark age.

He informs the rulers an alternative to this future is attainable, and explains to them generating an anthology of all human knowledge, the Encyclopedia Galactica, would not avert the inevitable fall of the Empire but would reduce the Dark Age to "only" 1,000 years.

The fearful state apparatchiks offer him exile to a remote world, Terminus, with other academic intellectuals who could help him create the Encyclopedia. He accepts their offer, and sets in motion his plan to set up two Foundations, one at either end of the galaxy, to preserve the accumulated knowledge of humanity and thereby shorten the Dark Age, once the Empire collapses. Seldon created the Foundation, knowing it would eventually be seen as a threat to rulers of the Empire, provoking an eventual attack. That is why he created a Second Foundation, unknown to the ruling class.

Asimov's psychohistory concept, based on the predictability of human actions in large numbers, has similarities to Strauss & Howe's generational theory. His theory didn't pretend to predict the actions of individuals, but formulated definite laws developed by mathematical analysis to predict the mass action of human groups. His novel explores the centuries old debate of whether human history proceeds in a predictable fashion, with individuals incapable of changing its course, or whether individuals can alter its progression.

The cyclical nature of history, driven by generational cohorts numbering tens of millions, has been documented over centuries by Strauss & Howe in their 1997 opus The Fourth Turning . Human beings in large numbers react in a herd-like predictable manner. I know that is disappointing to all the linear thinking individualists who erroneously believe one person can change the world and course of history.

The cyclical crisis's that occur every eighty years matches up with how every Foundation story centers on what is called a Seldon crisis, the conjunction of seemingly insoluble external and internal difficulties. The crises were all predicted by Seldon, who appears near the end of each story as a hologram to confirm the Foundation has traversed the latest one correctly.

The "Seldon Crises" take on two forms. Either events unfold in such a way there is only one clear path to take, or the forces of history conspire to determine the outcome. But, the common feature is free will doesn't matter. The heroes and adversaries believe their choices will make a difference when, in fact, the future is already written. This is a controversial viewpoint which angers many people because they feel it robs them of their individuality.

Most people don't want to be lumped together in an amalgamation of other humans because they believe admitting so would strip them of their sense of free will. Their delicate sensibilities are bruised by the unequivocal fact their individual actions are virtually meaningless to the direction of history. But, the madness of crowds can dramatically impact antiquity.

"In reading The History of Nations, we find that, like individuals, they have their whims and their peculiarities, their seasons of excitement and recklessness, when they care not what they do. We find that whole communities suddenly fix their minds upon one object and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first." – Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds

Many people argue the dynamic advancements in technology and science have changed the world in such a way to alter human nature in a positive way, thereby resulting in humans acting in a more rational manner. This alteration would result in a level of human progress not experienced previously. The falsity of this technological theory is borne out by the continuation of war, government corruption, greed, belief in economic fallacies, civic decay, cultural degradation, and global disorder sweeping across the world. Humanity is incapable of change. The same weaknesses and self- destructive traits which have plagued them throughout history are as prevalent today as they ever were.

Asimov's solution to the failure of humanity to change was to create an academic oriented benevolent ruling class who could save the human race from destroying itself. He seems to have been well before his time with regards to creating Shadow Governments and Deep State functionaries. It appears he agreed with his contemporary Edward Bernays. The masses could not be trusted to make good decisions, so they needed more intellectually advanced men to guide their actions.

"The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized.

Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind." – Edward Bernays – Propaganda

In Part Two of this article I will compare and contrast Donald Trump's rise to power to the rise of The Mule in Asimov's masterpiece. Unusually gifted individuals come along once in a lifetime to disrupt the plans of the existing social order.

Beam Me Up Scotty -> BaBaBouy , Mar 27, 2017 10:56 PM

" He seems to have been well before his time with regards to creating Shadow Governments and Deep State functionaries. It appears he agreed with his contemporary Edward Bernays. The masses could not be trusted to make good decisions, so they needed more intellectually advanced men to guide their actions."

The masses aren't the ones begging to start all of these wars. They are the ones TRYING to make a few good decisions. The Shadow Government and Deep State however, are hell bent on getting us all killed. Who exactly is the problem here??

LetThemEatRand , Mar 27, 2017 10:50 PM

Asimov was a good writer and created some great fiction. That's as far as it goes.

Huxle LetThemEatRand •Mar 27, 2017 10:50 PM y is the one who predicted the current state of affairs. Orwell gets honorable mention. You could also throw in some biblical passages for the mark of the beast, though the best part was clearly written about Nero.

biker Mar 27, 2017 11:06 PM
Of course its better to watch them eat themselves
https://www.theatlantic.com/politics/archive/2017/03/rewriting-the-rules...

[Mar 28, 2017] Trumpism is faux populism that appeals to white identity but actually serves plutocrats. That fundamental contradiction is now out in the open

Mar 28, 2017 | economistsview.typepad.com
DeDude , March 27, 2017 at 08:35 AM
This is an excellent discussion of populism and where Trump support comes from.

http://www.vox.com/conversations/2017/3/27/15037232/trump-populist-appeal-culture-economy

Peter K. -> DeDude... , March 27, 2017 at 08:39 AM
"Why Trump's populist appeal is about culture, not the economy"

Nope. Vox and the center-left are really pushing this propaganda for obvious reasons.

It's funny that even Sanjait and PGL disagree. Even funnier still that they refuse to talk about it!

Don't want to give the hippies ammunition when your job is to punch the hippies. Here's the blog post from Krugman on the same subject which they didn't want to talk about:

"This ties in with an important recent piece by Zack Beauchamp on the striking degree to which left-wing economics fails, in practice, to counter right-wing populism; basically, Sandersism has failed everywhere it has been tried. Why?

The answer, presumably, is that what we call populism is really in large degree white identity politics, which can't be addressed by promising universal benefits. Among other things, these "populist" voters now live in a media bubble, getting their news from sources that play to their identity-politics desires, which means that even if you offer them a better deal, they won't hear about it or believe it if told. For sure many if not most of those who gained health coverage thanks to Obamacare have no idea that's what happened.

That said, taking the benefits away would probably get their attention, and maybe even open their eyes to the extent to which they are suffering to provide tax cuts to the rich.

In Europe, right-wing parties probably don't face the same dilemma; they're preaching herrenvolk social democracy, a welfare state but only for people who look like you. In America, however, Trumpism is faux populism that appeals to white identity but actually serves plutocrats. That fundamental contradiction is now out in the open."

Populism and the Politics of Health by Krugman

https://krugman.blogs.nytimes.com/2017/03/14/populism-and-the-politics-of-health/

[Mar 27, 2017] Michael Hudson: Trump is Obama's Legacy. Will this Break up the Democratic Party?

Notable quotes:
"... By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is KILLING THE HOST: How Financial Parasites and Debt Bondage Destroy the Global Economy ..."
"... Naked Capitalism ..."
"... The New York Times ..."
"... U.S. presidential elections no longer are much about policy. Like Obama before him, Trump campaigned as a rasa tabla ..."
"... There is a covert economic program, to be sure, and it is bipartisan. It is to make elections about just which celebrities will introduce neoliberal economic policies with the most convincing patter talk. That is the essence of rasa tabla ..."
Mar 27, 2017 | www.nakedcapitalism.com
Posted on March 26, 2017 by Yves Smith By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is KILLING THE HOST: How Financial Parasites and Debt Bondage Destroy the Global Economy

Nobody yet can tell whether Donald Trump is an agent of change with a specific policy in mind, or merely a catalyst heralding an as yet undetermined turning point. His first month in the White House saw him melting into the Republican mélange of corporate lobbyists. Having promised to create jobs, his "America First" policy looks more like "Wall Street First." His cabinet of billionaires promoting corporate tax cuts, deregulation and dismantling Dodd-Frank bank reform repeats the Junk Economics promise that giving more tax breaks to the richest One Percent may lead them to use their windfall to invest in creating more jobs. What they usually do, of course, is simply buy more property and assets already in place.

One of the first reactions to Trump's election victory was for stocks of the most crooked financial institutions to soar, hoping for a deregulatory scythe taken to the public sector. Navient, the Department of Education's knee-breaker on student loan collections accused by the Consumer Financial Protection Bureau (CFPB) of massive fraud and overcharging, rose from $13 to $18 now that it seemed likely that the incoming Republicans would disable the CFPB and shine a green light for financial fraud.

Foreclosure king Stephen Mnuchin of IndyMac/OneWest (and formerly of Goldman Sachs for 17 years; later a George Soros partner) is now Treasury Secretary – and Trump is pledged to abolish the CFPB, on the specious logic that letting fraudsters manage pension savings and other investments will give consumers and savers "broader choice," e.g., for the financial equivalent of junk food. Secretary of Education Betsy DeVos hopes to privatize public education into for-profit (and de-unionized) charter schools, breaking the teachers' unions. This may position Trump to become the Transformational President that neoliberals have been waiting for.

But not the neocons. His election rhetoric promised to reverse traditional U.S. interventionist policy abroad. Making an anti-war left run around the Democrats, he promised to stop backing ISIS/Al Nusra (President Obama's "moderate" terrorists supplied with the arms and money that Hillary looted from Libya), and to reverse the Obama-Clinton administration's New Cold War with Russia. But the neocon coterie at the CIA and State Department are undercutting his proposed rapprochement with Russia by forcing out General Flynn for starters. It seems doubtful that Trump will clean them out.

Trump has called NATO obsolete, but insists that its members up their spending to the stipulated 2% of GDP - producing a windfall worth tens of billions of dollars for U.S. arms exporters. That is to be the price Europe must pay if it wants to endorse Germany's and the Baltics' confrontation with Russia.

Trump is sufficiently intuitive to proclaim the euro a disaster, and he recommends that Greece leave it. He supports the rising nationalist parties in Britain, France, Italy, Greece and the Netherlands, all of which urge withdrawal from the eurozone – and reconciliation with Russia instead of sanctions. In place of the ill-fated TPP and TTIP, Trump advocates country-by-country trade deals favoring the United States. Toward this end, his designated ambassador to the European Union, Ted Malloch, urges the EU's breakup. The EU is refusing to accept him as ambassador.

Will Trump's Victory Break Up the Democratic Party?

At the time this volume is going to press, there is no way of knowing how successful these international reversals will be. What is more clear is what Trump's political impact will have at home. His victory – or more accurately, Hillary's resounding loss and the way she lost – has encouraged enormous pressure for a realignment of both parties. Regardless of what President Trump may achieve vis-à-vis Europe, his actions as celebrity chaos agent may break up U.S. politics across the political spectrum.

The Democratic Party has lost its ability to pose as the party of labor and the middle class. Firmly controlled by Wall Street and California billionaires, the Democratic National Committee (DNC) strategy of identity politics encourages any identity except that of wage earners. The candidates backed by the Donor Class have been Blue Dogs pledged to promote Wall Street and neocons urging a New Cold War with Russia.

They preferred to lose with Hillary than to win behind Bernie Sanders. So Trump's electoral victory is their legacy as well as Obama's. Instead of Trump's victory dispelling that strategy, the Democrats are doubling down. It is as if identity politics is all they have.

Trying to ride on Barack Obama's coattails didn't work. Promising "hope and change," he won by posing as a transformational president, leading the Democrats to control of the White House, Senate and Congress in 2008. Swept into office by a national reaction against the George Bush's Oil War in Iraq and the junk-mortgage crisis that left the economy debt-ridden, they had free rein to pass whatever new laws they chose – even a Public Option in health care if they had wanted, or make Wall Street banks absorb the losses from their bad and often fraudulent loans.

But it turned out that Obama's role was to prevent the changes that voters hoped to see, and indeed that the economy needed to recover: financial reform, debt writedowns to bring junk mortgages in line with fair market prices, and throwing crooked bankers in jail. Obama rescued the banks, not the economy, and turned over the Justice Department and regulatory agencies to his Wall Street campaign contributors. He did not even pull back from war in the Near East, but extended it to Libya and Syria, blundering into the Ukrainian coup as well.

Having dashed the hopes of his followers, Obama then praised his chosen successor Hillary Clinton as his "Third Term." Enjoying this kiss of death, Hillary promised to keep up Obama's policies.

The straw that pushed voters over the edge was when she asked voters, "Aren't you better off today than you were eight years ago?" Who were they going to believe: their eyes, or Hillary? National income statistics showed that only the top 5 percent of the population were better off. All the growth in Gross Domestic Product (GDP) during Obama's tenure went to them – the Donor Class that had gained control of the Democratic Party leadership. Real incomes have fallen for the remaining 95 percent, whose household budgets have been further eroded by soaring charges for health insurance. (The Democratic leadership in Congress fought tooth and nail to block Dennis Kucinich from introducing his Single Payer proposal.)

No wonder most of the geographic United States voted for change – except for where the top 5 percent, is concentrated: in New York (Wall Street) and California (Silicon Valley and the military-industrial complex). Making fun of the Obama Administration's slogan of "hope and change," Trump characterized Hillary's policy of continuing the economy's shrinkage for the 95% as "no hope and no change."

Identity Politics as Anti-Labor Politics

A new term was introduced to the English language: Identity Politics. Its aim is for voters to think of themselves as separatist minorities – women, LGBTQ, Blacks and Hispanics. The Democrats thought they could beat Trump by organizing Women for Wall Street (and a New Cold War), LGBTQ for Wall Street (and a New Cold War), and Blacks and Hispanics for Wall Street (and a New Cold War). Each identity cohort was headed by a billionaire or hedge fund donor.

The identity that is conspicuously excluded is the working class. Identity politics strips away thinking of one's interest in terms of having to work for a living. It excludes voter protests against having their monthly paycheck stripped to pay more for health insurance, housing and mortgage charges or education, or better working conditions or consumer protection – not to speak of protecting debtors.

Identity politics used to be about three major categories: workers and unionization, anti-war protests and civil rights marches against racist Jim Crow laws. These were the three objectives of the many nationwide demonstrations. That ended when these movements got co-opted into the Democratic Party. Their reappearance in Bernie Sanders' campaign in fact threatens to tear the Democratic coalition apart. As soon as the primaries were over (duly stacked against Sanders), his followers were made to feel unwelcome. Hillary sought Republican support by denouncing Sanders as being as radical as Putin's Republican leadership.

In contrast to Sanders' attempt to convince diverse groups that they had a common denominator in needing jobs with decent pay – and, to achieve that, in opposing Wall Street's replacing the government as central planner – the Democrats depict every identity constituency as being victimized by every other, setting themselves at each other's heels. Clinton strategist John Podesta, for instance, encouraged Blacks to accuse Sanders supporters of distracting attention from racism. Pushing a common economic interest between whites, Blacks, Hispanics and LGBTQ always has been the neoliberals' nightmare. No wonder they tried so hard to stop Bernie Sanders, and are maneuvering to keep his supporters from gaining influence in their party.

When Trump was inaugurated on Friday, January 20, there was no pro-jobs or anti-war demonstration. That presumably would have attracted pro-Trump supporters in an ecumenical show of force. Instead, the Women's March on Saturday led even the pro-Democrat New York Times to write a front-page article reporting that white women were complaining that they did not feel welcome in the demonstration. The message to anti-war advocates, students and Bernie supporters was that their economic cause was a distraction.

The march was typically Democratic in that its ideology did not threaten the Donor Class. As Yves Smith wrote on Naked Capitalism : "the track record of non-issue-oriented marches, no matter how large scale, is poor, and the status of this march as officially sanctioned (blanket media coverage when other marches of hundreds of thousands of people have been minimized, police not tricked out in their usual riot gear) also indicates that the officialdom does not see it as a threat to the status quo." [1]

Hillary's loss was not blamed on her neoliberal support for TPP or her pro-war neocon stance, but on the revelations of the e-mails by her operative Podesta discussing his dirty tricks against Bernie Sanders (claimed to be given to Wikileaks by Russian hackers, not a domestic DNC leaker as Wikileaks claimed) and the FBI investigation of her e-mail abuses at the State Department. Backing her supporters' attempt to brazen it out, the Democratic Party has doubled down on its identity politics, despite the fact that an estimated 52 percent of white women voted for Trump. After all, women do work for wages. And that also is what Blacks and Hispanics want – in addition to banking that serves their needs, not those of Wall Street, and health care that serves their needs, not those of the health-insurance and pharmaceuticals monopolies.

Bernie did not choose to run on a third-party ticket. Evidently he feared being accused of throwing the election to Trump. The question is now whether he can remake the Democratic Party as a democratic socialist party, or create a new party if the Donor Class retains its neoliberal control. It seems that he will not make a break until he concludes that a Socialist Party can leave the Democrats as far back in the dust as the Republicans left the Whigs after 1854. He may have underestimated his chance in 2016.

Trump's Effect on U.S. Political Party Realignment

During Trump's rise to the 2016 Republican nomination it seemed that he was more likely to break up the Republican Party. Its leading candidates and gurus warned that his populist victory in the primaries would tear the party apart. The polls in May and June showed him defeating Hillary Clinton easily (but losing to Bernie Sanders). But Republican leaders worried that he would not support what they believed in: namely, whatever corporate lobbyists put in their hands to enact and privatize.

The May/June polls showed Trump and Clinton were the country's two most unpopular presidential candidates. But whereas the Democrats maneuvered Bernie out of the way, the Republican Clown Car was unable to do the same to Trump. In the end they chose to win behind him, expecting to control him. As for the DNC, its Wall Street donors preferred to lose with Hillary than to win with Bernie. They wanted to keep control of their party and continue the bargain they had made with the Republicans: The latter would move further and further to the right, leaving room for Democratic neoliberals and neocons to follow them closely, yet still pose as the "lesser evil." That "centrism" is the essence of the Clintons' "triangulation" strategy. It actually has been going on for a half-century. "As Tanzanian President Julius Nyerere quipped in the 1960s, when he was accused by the US of running a one-party state, 'The United States is also a one-party state but, with typical American extravagance, they have two of them'." [2]

By 2017, voters had caught on to this two-step game. But Hillary's team paid pollsters over $1 billion to tell her ("Mirror, mirror on the wall ") that she was the most popular of all. It was hubris to imagine that she could convince the 95 Percent of the people who were worse off under Obama to love her as much as her East-West Coast donors did. It was politically unrealistic – and a reflection of her cynicism – to imagine that raising enough money to buy television ads would convince working-class Republicans to vote for her, succumbing to a Stockholm Syndrome by thinking of themselves as part of the 5 Percent who had benefited from Obama's pro-Wall Street policies.

Hillary's election strategy was to make a right-wing run around Trump. While characterizing the working class as white racist "deplorables," allegedly intolerant of LBGTQ or assertive women, she resurrected the ghost of Joe McCarthy and accused Trump of being "Putin's poodle" for proposing peace with Russia. Among the most liberal Democrats, Paul Krugman still leads a biweekly charge at The New York Times that President Trump is following Moscow's orders. Saturday Night Live, Bill Maher and MSNBC produce weekly skits that Trump and General Flynn are Russian puppets. A large proportion of Democrats have bought into the fairy tale that Trump didn't really win the election, but that Russian hackers manipulated the voting machines. No wonder George Orwell's 1984 soared to the top of America's best-seller lists in February 2017 as Donald Trump was taking his oath of office.

This propaganda paid off on February 13, when neocon public relations succeeded in forcing the resignation of General Flynn, whom Trump had appointed to clean out the neocons at the NSA and CIA. His foreign policy initiative based on rapprochement with Russia and hopes to create a common front against ISIS/Al Nusra seemed to be collapsing.

Tabula Rasa Celebrity Politics

U.S. presidential elections no longer are much about policy. Like Obama before him, Trump campaigned as a rasa tabla , a vehicle for everyone to project their hopes and fancies. What has all but disappeared is the past century's idea of politics as a struggle between labor and capital, democracy vs. oligarchy.

Who would have expected even half a century ago that American politics would become so post-modern that the idea of class conflict has all but disappeared. Classical economic discourse has been drowned out by their junk economics.

There is a covert economic program, to be sure, and it is bipartisan. It is to make elections about just which celebrities will introduce neoliberal economic policies with the most convincing patter talk. That is the essence of rasa tabla politics.

Can the Democrats Lose Again in 2020?

Trump's November victory showed that voters found him to be the Lesser Evil, but all that voters really could express was "throw out the bums" and get a new set of lobbyists for the FIRE sector and corporate monopolists. Both candidates represented Goldman Sachs and Wall Street. No wonder voter turnout has continued to plunge.

Although the Democrats' Lesser Evil argument lost to the Republicans in 2016, the neoliberals in control of the DNC found the absence of a progressive economic program to less threatening to their interests than the critique of Wall Street and neocon interventionism coming from the Sanders camp. So the Democrat will continue to pose as the Lesser Evil party not really in terms of policy, but simply ad hominum . They will merely repeat Hillary's campaign stance: They are not Trump. Their parades and street demonstrations since his inauguration have not come out for any economic policy.

On Friday, February 10, the party's Democratic Policy group held a retreat for its members in Baltimore. Third Way "centrists" (Republicans running as Democrats) dominated, with Hillary operatives in charge. The conclusion was that no party policy was needed at all. "President Trump is a better recruitment tool for us than a central campaign issue,' said Washington Rep. Denny Heck, who is leading recruitment for the Democratic Congressional Campaign Committee (DCCC)." [3]

But what does their party leadership have to offer women, Blacks and Hispanics in the way of employment, more affordable health care, housing or education and better pay? Where are the New Deal pro-labor, pro-regulatory roots of bygone days? The party leadership is unwilling to admit that Trump's message about protecting jobs and opposing the TPP played a role in his election. Hillary was suspected of supporting it as "the gold standard" of trade deals, and Obama had made the Trans-Pacific Partnership the centerpiece of his presidency – the free-trade TPP and TTIP that would have taken economic regulatory policy out of the hands of government and given it to corporations.

Instead of accepting even Sanders' centrist-left stance, the Democrats' strategy was to tar Trump as pro-Russian, insist that his aides had committed impeachable offenses, and mount one parade after another. "Rep. Marcia Fudge of Ohio told reporters she was wary of focusing solely on an "economic message" aimed at voters whom Trump won over in 2016, because, in her view, Trump did not win on an economic message. "What Donald Trump did was address them at a very different level - an emotional level, a racial level, a fear level," she said. "If all we talk about is the economic message, we're not going to win." [4] This stance led Sanders supporters to walk out of a meeting organized by the "centrist" Third Way think tank on Wednesday, February 8.

By now this is an old story. Fifty years ago, socialists such as Michael Harrington asked why union members and progressives still imagined that they had to work through the Democratic Party. It has taken the rest of the country half a century to see that Democrats are not the party of the working class, unions, middle class, farmers or debtors. They are the party of Wall Street privatizers, bank deregulators, neocons and the military-industrial complex. Obama showed his hand – and that of his party – in his passionate attempt to ram through the corporatist TPP treaty that would have enabled corporations to sue governments for any costs imposed by public consumer protection, environmental protection or other protection of the population against financialized corporate monopolies.

Against this backdrop, Trump's promises and indeed his worldview seem quixotic. The picture of America's future he has painted seems unattainable within the foreseeable future. It is too late to bring manufacturing back to the United States, because corporations already have shifted their supply nodes abroad, and too much U.S. infrastructure has been dismantled.

There can't be a high-speed railroad, because it would take more than four years to get the right-of-way and create a route without crossing gates or sharp curves. In any case, the role of railroads and other transportation has been to increase real estate prices along the routes. But in this case, real estate would be torn down – and having a high-speed rail does not increase land values.

The stock market has soared to new heights, anticipating lower taxes on corporate profits and a deregulation of consumer, labor and environmental protection. Trump may end up as America's Boris Yeltsin, protecting U.S. oligarchs (not that Hillary would have been different, merely cloaked in a more colorful identity rainbow). The U.S. economy is in for Shock Therapy. Voters should look to Greece to get a taste of the future in this scenario.

Without a coherent response to neoliberalism, Trump's billionaire cabinet may do to the United States what neoliberals in the Clinton administration did to Russia after 1991: tear out all the checks and balances, and turn public wealth over to insiders and oligarchs. So Trump's his best chance to be transformative is simply to be America's Yeltsin for his party's oligarchic backers, putting the class war back in business.

What a Truly Transformative President Would Do/Would Have Done

No administration can create a sound U.S. recovery without dealing with the problem that caused the 2008 crisis in the first place: over-indebtedness. The only one way to restore growth, raise living standards and make the economy competitive again is a debt writedown. But that is not yet on the political horizon. Obama's doublecross of his voters in 2009 prevented the needed policy from occurring. Having missed this chance in the last financial crisis, a progressive policy must await yet another crisis. But so far, no political party is preparing a program to juxtapose to Republican-Democratic austerity and scale-back of Social Security, Medicare and social spending programs in general.

Also no longer on the horizon is a more progressive income tax, or a public option for health care – or for banking, or consumer protection against financial fraud, or for a $15-an-hour minimum wage, or for a revived protection of labor's right to unionize, or environmental regulations.

It seems that only a new party can achieve these aims. At the time these essays are going to press, Sanders has committed himself to working within the Democratic Party. But that stance is based on his assumption that somehow he can recruit enough activists to take over the party from Its Donor Class.

I suspect he will fail. In any case, it is easier to begin afresh than to try to re-design a party (or any institution) dominated by resistance to change, and whose idea of economic growth is a pastiche of tax cuts and deregulation. Both U.S. parties are committed to this neoliberal program – and seek to blame foreign enemies for the fact that its effect is to continue squeezing living standards and bloating the financial sector.

If this slow but inexorable crash does lead to a political crisis, it looks like the Republicans may succeed in convening a new Constitutional Convention (many states already have approved this) to lock the United States into a corporatist neoliberal world. Its slogan will be that of Margaret Thatcher: TINA – There Is No Alternative.

And who is to disagree? As Trotsky said, fascism is the result of the failure of the left to provide an alternative.

[Mar 27, 2017] As soon as any intelligence agency becomes a political player this means effective end of any, even traditional the USA form of façade-based , two party oligarchical rule called democracy

Notable quotes:
"... Actually "after 9/11" national security state is already a huge step forward in this direction, so we are almost arrived at the point when the USA democratic "façade" became Potemkin village for tourists. ..."
"... That's essentially the difference between "surface state" and the "deep state" that is now actively discussed in the USA due to attempt of color revolution against Trump with intelligence agencies and FBI coming out as political players. ..."
"... And as soon as any intelligence agency becomes a political player this means effective end of any, even traditional the USA form of "façade-based", two party oligarchical rule called "democracy." ..."
Mar 27, 2017 | economistsview.typepad.com

libezkova -> im1dc... March 26, 2017 at 07:58 PM

"That's European History not ours"

Hardly so.

Legitimacy of the US "democratic" governance can survive only as long as:

  1. 1. People of America had an expectation that if they work hard they can gain a better life. This is not true now for the majority (say, lower 80%) of population.
  2. 2. Or at least that their children could gain that better life, if they get some college degree and work hard. This is also not true now for majority of graduates. Only those, who graduates at the top of the class, or from Ivy League universities can expect to get decent positions. Most graduation are happy to land at helpdesk, doing job that does not require any college education, because it is better then being a waiter.

IMHO, if neither (1) not (2) are applicable the legitimacy of the democratic government evaporates.

And that creates favorable condition for the transition to the dictatorship in some form.

Actually "after 9/11" national security state is already a huge step forward in this direction, so we are almost arrived at the point when the USA democratic "façade" became Potemkin village for tourists.

That's essentially the difference between "surface state" and the "deep state" that is now actively discussed in the USA due to attempt of color revolution against Trump with intelligence agencies and FBI coming out as political players.

And as soon as any intelligence agency becomes a political player this means effective end of any, even traditional the USA form of "façade-based", two party oligarchical rule called "democracy."

That's a dictatorship: a form of government where a country is ruled by one person or by one or several non-elected political agencies (like the Communist Party, or STASI). And were the power is exercised through mechanisms that are completely outside the control of electorate.

If somebody here tells that Comey, or in the past Clapper and Michael Morell, were not a political players in this presidential cycle, the danger is that half of Mexico and Canada readers of this blog can die laughing.

[Mar 26, 2017] Next AEA meeting should be held in Youngstown so economists can admire the fruit of their labors

Mar 26, 2017 | economistsview.typepad.com
xxx , March 26, 2017 at 07:58 AM
Next American Economics Association meeting should be held in Youngstown so economists can admire the fruit of their labors. See all the destroyed buildings, the raging heroin epidemic and mass poverty your support of de-industrialization and free trade brought to America.

Every regional meeting should be held in any number of America's thousands of destroyed dilapidated cities - E. St. Louis, Rochester, Cleveland, Greensboro NC, San Bernadino - there are so many de-industrialized ghettoes from which to choose!

Tom aka Rusty -> Next AEA meeting should be held in Youngstown so economists can admire the fruit of their labors... , March 26, 2017 at 09:41 AM
I've been recommending Detroit for years.

libezkova -> Tom aka Rusty ... March 26, 2017 at 03:34 PM

That might not help. Those guy have no morals. Simply none. Nothing is left from 10 commandment in their brains. They have only "Greed is good" etched in it.

Just look at Mankiw. Noting can stop him from cashing in on all this neoclassical crap.

Or, for a change, Krugman's behavior during elections. What a despicable neoliberal stooge he proved to be. His dirty attacks on Sanders should probably be re-printed as a leaflet and distributed nationwide -- as a warning.

It is so difficult to understand that "when nothing left on the left, working class and lower middle class turns to far right." ?

What a despicable stooge of financial oligarchy. Another Rubin's boy, much like Summers...

And now he has the audacity to criticize Trump, the person he was working to put in power for more then a decade. I do not defend Trump, but it is important to ask a simple question: Are the members of the criminal Clinton gang (who essentially practiced racketeering via Clinton Foundation) and "over-connected" to intelligence services Obama paragons of virtue?

Are they conceptually any different from Trump ?

In the past they practices the same dirty neoliberal tricks as Trump tying to squeeze the majority of population in favor of financial oligarchy (Obama "non-prosecution" after 2008 is a telling example, and shows who he really is), but probably with more polish and better PR. That's the only difference.

http://www.salon.com/2013/03/09/the_world_according_to_milton_friedman_partner/

== quote ==

Discussions of neoliberalism, on both the left and the right, suffer from what Paul Krugman and others have called "zombie" ideas. These are economic concepts that have been long discredited, but continue to shamble on. On the right, a central zombie idea is that reduced state regulation of markets leads to sustainable economic growth. If you believe this, then the rise of neoliberalism is a no-brainer.

Neoliberalism is simply the economic philosophy that works. But why should anyone believe this?

The idea that unleashing free markets then leads to good economic times should never have survived the Great Depression, and should surely be killed for good by the Great Recession and its aftermath.

[Mar 26, 2017] There is no such thing as a "natural rate of interest"

Mar 26, 2017 | economistsview.typepad.com
RGC, March 26, 2017 at 07:06 AM
In short, there is no such thing as a "natural rate of interest".

........................

What then? It is difficult to say, exactly, whether the prevalent confusions are the result of sloppy thinking, an incoherent textbook pedagogy, or a deliberate desire to cover for the Federal Reserve and to obstruct potential criticism of the independent central bank. As a next step, let us ask: is there a better theory of interest rates out there, somewhere in the great work of the economists?

In the CEA paper, as in most of this so-called literature, the 20th century British economist John Maynard Keynes is not cited. Yet it is a fact that Keynes did write an influential book with the word "Interest" in the title. It was called The General Theory of Employment Interest and Money, published in 1936. In which Keynes states, of the classical theory of interest – that theory of loanable funds overlying a natural rate – that his own analysis "will have made it plain that this account of the matter must be erroneous" (p. 177). Perhaps it is worthwhile to seek Keynes's counsel at this point?

Keynes's theory of interest does not rest on the capital stock. And in Keynes as in the real world, there is no "capital market" that equates household saving with business investment.

Instead, Keynes's theory of interest is about the market for money – a market that definitely does exist in the real world. He wrote: "The rate of interest is not the 'price' which brings into equilibrium the demand for resources to invest with the readiness to abstain from consumption. It is the 'price' which equilibrates the desire to hold wealth in the form of cash with the available quantity of cash" (p. 167). In other words, interest rates are a portfolio issue. They are determined in the money markets, by how – in what form – people with wealth choose, at any given time, to hold that wealth. You pay interest, in order to get people to hold their wealth in less-liquid forms, such as bonds – and this is what provides firms with a secure source of financing, which then permits them to invest.

Keynes's theory of interest is the pure common sense of how financial markets work. So why is it treated, by our leading liberal economists, as though it didn't exist? Why all this confusing folderol about natural and neutral rates? The apparent answer is damning. In the theories our economists like, a technical theory of interest creates a technical theory of income distribution, since interest rates govern the incomes of creditors against debtors, of the rich against the poor, of profits against wages. Thomas Piketty's recent book is a nice instance of this point, with its argument that the great inequalities of capitalism are due to interest rates higher than the rate of economic growth. If interest somehow reflects the physical productivity of the capital stock, then the consequences may be unfortunate – but they are inevitable and not something of which it is proper to complain.

http://www.paecon.net/PAEReview/issue78/Galbraith78.pdf

RGC -> RGC... , March 26, 2017 at 07:39 AM
"Why all this confusing folderol about natural and neutral rates? The apparent answer is damning. In the theories our economists like, a technical theory of interest creates a technical theory of income distribution, since interest rates govern the incomes of creditors against debtors, of the rich against the poor, of profits against wages..........If interest somehow reflects the physical productivity of the capital stock, then the consequences may be unfortunate – but they are inevitable and not something of which it is proper to complain."

[Is that clear enough?......Galbraith is accusing mainstream economists of acting as apologists for rentiers.]

[Mar 26, 2017] The operatives of what Gore Vidal called the Property Party, (which has two right wings,) co-opted each successive movement. Lower middle class and working class people had the Koch brothers funded Tea Party pushed on them. The DNC sponsored identity groups quickly sucked all oxigen from the protest movement they represented

Notable quotes:
"... As Mr. Hudson explained in the piece, the operatives of what Gore Vidal called the Property Party, (which has two right wings,) co-opted each successive movement. Lower middle class and working class people had the Koch brothers funded Tea Party pushed on them. The DNC sponsored "identity groups" quickly sucked all originality out of the various specious "identities" so represented. On the war front, the Pentagon imposed "embedment" upon journalists. In each case, the viewpoints of the "average" person so involved were restricted to vistas guaranteed to promote the "sponsored" agenda. Thus, the present assault upon "alternative" media makes sense from a status quo perspective. It is all about control of the dialogue. ..."
"... Perez only got 235 votes; Sanders' candidate Ellison got 200. The Democratic Party establishment did not "ignore" Sanders by running Perez. They were semi-desperately trying to block him (and his cohort) from advancing on a low rung on the ladder to power. ..."
"... Wikileaks made it plain what the Democrats do to mavericks who win races without a party bit in their mouths. The corruption is institutional, it is their operatives' identity. ..."
"... The "masses of people who have dropped out of the workforce" are old, overweight, have multiple physical deficits and are hooked on at least 2 types of prescription dope. They will not be manning your nostalgia-draped barricades. Not ever. ..."
"... I agree with Hudson's critique of FIRE and the problem of debt in our society. But it is not easy to explain to the general public - which would not recognize the acronym. ..."
"... "Also, while I agree Dems are dominated by Blue Dogs who want to use Wall Street money to run Repub lite candidates in purple states, and that their appeal to identity politics is manipulative and a way to deflect from economic issues," ..."
"... " it does not logically follow that voters do not often think of themselves and their goals in terms of racism or religion or guns. Their are cultural "us v them" identities that have a powerful effect on politics." ..."
"... "We can beat them if we find common sense solutions to our problems and articulate those ideas to our neighbors. We need energy and hard work, but it is not clear that a third party is needed." ..."
"... I also agree that there is no solution, certainly not an evolutionary solution via EITHER of the two parties. ..."
"... The big changes in the USA occurred during the Great Depression as financial reform was introduced, the idea of government infrastructure could provide employment and what I believe is little mentioned, an increased awareness on the part of many that their success was not achieved solely by their own efforts. ..."
"... Many of the USA's post war corporate executives should have remembered that their families struggled during the thirties, and this may have made them more connected with their employees and communities. ..."
"... People are not sheep. We've been psyop'd senseless. "Public relations" began around the turn of the 20th century. It was ramped up by orders of magnitude after WWII. ..."
"... Gore Vidal quotes JFK as saying to him, we've entered an era in which "it is the *appearance of things that matters" ..."
"... Psychology and other social sciences have been weaponized and turned against us. With a facile understanding of the human mind (as if it were nothing but a mere mechanism), immense effort has gone into controlling the inputs in order to control the outputs (behavior). ..."
"... Newly declassified documents from the Reagan presidential library help explain how the U.S. government developed its sophisticated psychological operations capabilities that – over the past three decades – have created an alternative reality both for people in targeted countries and for American citizens, a structure that expanded U.S. influence abroad and quieted dissent at home. ..."
"... Today, "public opinion" is a Frankenstein's monster. Most of my fellow Americans believe in a world that never existed and doesn't exist right now. We can't even agree on what happened to JFK, or MLK, or what happened on 9/11/01. ..."
"... Contra UF, it's not that people are incapable of rational thought; rather, the information we have is hopelessly corrupted. People are acting rationally, but the numerators and denominators have been faked. On purpose. Or did the Russians really do it? ..."
"... It's far more simpler. Charter schools are about following the money. Public schools have seemingly huge revenue streams. Why can't GE get a cut is the thought process? For profit Healthcare was forbidden until 1973 (thanks to Teddy), why not public schools? ..."
"... The HMO Act of 1973 (thanks Teddy and Tricky Dick; bipartisanship at its finest) made it easier to start and run HMOs which faced regulatory hurdles mostly due to financing. Non profits had an easier time of it hence Hospitals named "St X" or "X General." Since the hospital were non profits and employers made deals with the hospitals, health insurance was effectively non-profit. There were gaps, mostly in rural areas. Other changes from the HMO Act of 1973 encouraged profit seeking from denial of coverage to pushing unnecessary procedures or prescriptions. ..."
"... The US Left has been controlled opposition since 1950. There was never a chance it could provide a reasonable and effective alternative. FBI/CIA moles make sure they never will. The Democrats have never been true Left FDR didn't really betray his class, he saved them from their own stupidity. ..."
"... "As Tanzanian President Julius Nyerere quipped in the 1960s, when he was accused by the US of running a one-party state, 'The United States is also a one-party state but, with typical American extravagance, they have two of them'." ..."
"... The identity politics of today lack in solidarity, too. What with Hillary Clinton running the most ageist campaign in memory, Obama breaking the record on deportations, Bill Clinton blowing racist dogwhistles as hard he can and also helping to shepherd a police state that puts Thailand to shame, and the whole of the Democratic Party stoking Russophobia and neoconservative. ..."
"... The diagnosis is mostly correct. But omits the role class bigotry and affluenza with attendant celebrity culture and pursuit of prestige plays. Thus the prognosis and protocol go astray. ..."
"... The wealthy and the politicians don't care about you/us. They care about maintaining any fiction that allows them to keep acquiring. Trump is not the problem; Mercer"s values are The Problem. Trump is the PERFECT reality TV/celebrity fantasy creature to keep the twisted Mercer chariot's wheels turning. ..."
"... Bernie was NOT The Answer. Putting on a mask of concern does not take away the sorrows of empire. As long as the blatant US militarism and imperialism continues we cannot unite the working class. Everything it needs to flourish continues - mass incarceration, join the military or stay in the ghetto, graft and corruption of military/industrial/media complex, no respect for other cultures being swarmed, consumerism. ..."
"... The jobs plan: more prison guards, border agents, munitions makers, soldiers, cops, various bodyguards for the rich and the other useful mandarins to the affluenza-stricken is set in stone. ..."
"... Michael Hudson makes great points but I am still wrestling with his (and others) push back against so-called identity politics as it pertains to this perception of it splintering or at least limiting the Democratic party. The Dems are most certainly a party committed to the ideals of neoliberalism and corporatism. They did not lose this election based on "Russian hacking/emails" and other trite nonsense. ..."
"... The Obama part of maintaining the looting of society status quo. ..."
"... The point about Trump being the US Yeltsin is one very much worth considering, if only because Russia, after much degradation and also suffering, has managed to begin to overcome those shameful and depressing times. May we do so also. ..."
"... Excellent piece. Americans have forgotten that the things they took for granted (40 hour week, humane working conditions, employer provided benefits etc.) were gained by the blood, sweat and tears of their forebears. ..."
"... The Clintons, the Obamas, the Blairs, possibly the Macrons, the Ruttes, even the Merkels of this world are wolves in sheep's clothing. They have come to represent, for increasing numbers, little better than managed decline in apparently safe hands, conducted in plain sight, in the ever narrower interests of the few. ..."
"... Regarding the subject line of the article. I'd say that the Democratic Party has been the "paid loyal opposition" for quite a while. . . meaning they are paid to loose. Given the party's ties to Wall Street and Big Pharma it's pretty clear they mostly work for the same folks that own "mainstream" Republicans so their apparent fecklessness and inability to mount ANY sort of effective opposition, even when they are in the majority, shouldn't be any surprise. ..."
Mar 26, 2017 | www.nakedcapitalism.com
ambrit, March 26, 2017 at 5:29 am

As long as the people of America had a reasonable expectation of gaining a better life, or, the next best thing, that their children would gain that better life, the Social Contract remained strong. Aspiration was both a spur to striving within the existing system, and a palliative for most discontents encountered. Where the status quo did not offer any real hope, the Civil Rights for minorities being an example, more "robust" methods were necessary, and were employed. What else is civil disobedience but counter violence against the State? Naturally, the State ramps up it's 'violence' in an attempt to quash the disaffected masses.

In this struggle, optics and expectations are crucial. As Gil Scott-Heron famously invoked; "The revolution will not be televised." Paradoxically, by ensuring the wide dissemination of images of the nascent "Revolution," activists ensured that whatever came out of the Days of Rage would not be a true revolution. The newsreels of colored people bravely enduring police oppression in the American South guaranteed that that particular issue would not be dumped down Orwell's "Memory Hole." Television footage of young American men fighting and dying in Vietnam spurred the families of those who could even potentially be drafted to go overseas to die for their country to take to the streets and vote against the war and the warmongers. Gay rights is generally considered to have begun to take form and substance after the "Stonewall Riots" in New York in 1969. See: https://www.socialistalternative.org/stonewall-riots-1969/ By "going postal," the New York gays declared loud and proud that the old way of doing business was no longer acceptable to them.

As Mr. Hudson explained in the piece, the operatives of what Gore Vidal called the Property Party, (which has two right wings,) co-opted each successive movement. Lower middle class and working class people had the Koch brothers funded Tea Party pushed on them. The DNC sponsored "identity groups" quickly sucked all originality out of the various specious "identities" so represented. On the war front, the Pentagon imposed "embedment" upon journalists. In each case, the viewpoints of the "average" person so involved were restricted to vistas guaranteed to promote the "sponsored" agenda. Thus, the present assault upon "alternative" media makes sense from a status quo perspective. It is all about control of the dialogue.

The main strength of the old style identity politics is it's ability to focus the energies of participants toward a particular goal. To that end, the concept of the "United Front" is useful. You watch my back, I'll show up at your demonstration is the operative concept. Thus, the development and widespread dissemination of images of a uniting "struggle" are needed. All of this is actually self evident. What is needed are "leaders" ready to stand up and shout it out over the rooftops.

When Paul Revere made his famous ride, he was actually stopped by British troops before he could reach either Concord or Lexington, Massachusetts. A companion, a Dr. Prescott made the actual warnings to the American rebels. Revere and Prescott were members of an extensive Patriot organization. A Doctor and an Artisan, two usually distinct social classes at the time were collaborating towards a common goal. A "United Front" made the American Revolution. See: http://www.biography.com/news/paul-reveres-ride-facts Today's struggle can proceed no differently.

Jagger , March 26, 2017 at 9:45 am

A Doctor and an Artisan, two usually distinct social classes at the time were collaborating towards a common goal

"We must, indeed, all hang together, or most assuredly we shall all hang separately." A bit of wisdom from the mind of Ben Franklin in the early days of the revolution.

ambrit , March 26, 2017 at 11:26 am

Wonderful! Dr. Franklin would be considered a "radical" even by today's standards. "The more things change .."

steelhead23 , March 26, 2017 at 11:38 am

Let us remember, when a college student asked Rep. Nancy Pelosi whether the party might move toward a more socialistic economic system, she answered, " We're capitalists. That's just the way it is. ", and went on to support a return to noblesse oblige, completely failing to grasp the contradiction between modern neoliberal theology (maximizing shareholder return/profits) and such niceties as paying a living wage. We the left have a problem we need to attack head-on – our semantics have been demonized. Socialism is widely disparaged as subordinating individual will to the state – as tyranny – and the MSM often portrays economic downturns in social democracies (Venezuela, Argentina) as caused by foolish socialist policies, not broadscale economic issues (oil glut), or financial stupidity of prior governments (Argentina). I applaud Senator Sanders for continuing to use the moniker "social democrat" as he has done much to legitimize the word. We need more. Ich bin ein social democrat.

ambrit , March 26, 2017 at 1:44 pm

Oh yes, and I remember wondering when I first read about that "interaction," just what did Pelosi really mean by Capitalist? As someone else here remarked, she might have been confusing capitalist with corporatist in her mind.

polecat , March 26, 2017 at 6:14 pm

'Crony' capitalists is what she really meant ..

Ah the Crony California Quotient Always looking out for them and theirs' !

Gman , March 26, 2017 at 5:51 pm

Doctrinaire [adj]

seeking to impose a doctrine in all circumstances without regard to practical considerations:

1. 'Nancy Pelosi asked whether the party might move toward a more socialistic economic system, she answered, "We're capitalists. That's just the way it is."

pissed younger baby boomer , March 26, 2017 at 7:23 pm

That's why I am changing my party status to one of the socialist parties in Oregon .

DJG , March 26, 2017 at 12:35 pm

ambrit: Excellent comment. What I would add, though, is that all three of the movements that you cite had equality as a main goal: Black people wanted equality in civil rights and civil liberties. The antiwar movement drew strength from the draft, which affected people of all classes (men most directly) and led to various unequal uses of deferments that are causes of political problems to this very day. Gay folk also wanted civil rights and civil liberties (although marriage equality may not be the proper culmination–identity politics gone divergent).

A while back, I read Norberto Bobbio's influential little book, Right and Left. He states that the main motivators of leftist politics are liberty, equality, and fraternité (let's call it solidarity). And he points out that leftists usually place equality first. So to animate a new movement, we have to get back to issues of political and economic equality. The metaphor of The One Percent is a hint. That hint has to be expanded.

ambrit , March 26, 2017 at 1:35 pm

Good point. The American Revolt had it's "Committees of Correspondence." They operated outside of the MSM of the day. The Civil Rights movement early on had the black churches as sanctuaries and disseminators of the message. The anti-war movement had both the Underground press and, unwittingly, later, the MSM of the day proclaiming the problem. In general, each information spreading system used was not a part of the "Official Version" apparatus.

The point about equality is important. The unmentioned basis of Capitalism is competition. Competition implies inequality as the outcome. This is not true aspiration, but aspiration's evil twin, ambition. So, the Left's real uphill slog is going to be to frame the debate about social policy in an anti-competitive form.

Bashing the .01% is always good fun, but, as many have remarked, and the recent failed Democrat Party campaigns have demonstrated, a positive goal is needed to really motivate and engage those of us "on the ground." As earlier remarked, a "Single Payer" healthcare campaign, framed as an "equality" measure would do the trick. There are doubtless many other issues that would lend themselves to a similar treatment. Meld these issues into a "Progressive United Front" campaign and we will begin to see some movement.

In essence, as the earlier socialist and communist thinkers proclaimed, the ownership of the means of production are a good place to start. Given the unequal distribution of such ownership however, the next best thing would be the control of the distribution of the fruits of production; especially germaine with the rise of automation.

It's time to make "We the People" great.

DJG , March 26, 2017 at 3:06 pm

ambrit: Agreed, again. And time for some poetry, too:

Langston Hughes

https://www.poets.org/poetsorg/poem/let-america-be-america-again

Note "equality" front and center in his prophetic vision.

ambrit , March 26, 2017 at 3:19 pm

I also see the dream ahead of him, beckoning, beguiling, beatifying despite the false realities around him.
Something to believe in will generally trump something to be fearful of, in the hearts of men.

marym , March 26, 2017 at 2:07 pm

Great comment and resulting discussion.

IMO there's not a practical electoral solution, in the sense of electing a bunch of candidates at multiple levels of government to unwind or replace all the laws, regulations/lack of regulations, court decisions, and algorithms that misgovern our lives and misappropriate our wealth.

Building on your comment ambrit@5:29 and Ulysses@8:38:

A – No more than 3 universal issues (Medicare for All; publicly funded tuition for post-secondary education, training, and apprenticeships; end the wars, for example). Medicare for All is part of the discussion now and should have a prominent place.

B – Activism continues, as it must and will, in other areas: issues of survival (police violence, incarceration, homelessness and hunger; minimum wage ); support for activism across issues (Food not Bombs, ACLU and NLG, Light Brigades, local jail and bail support ); and forward-looking activism (local sustainable food and energy solutions, workplace and community coops ).

C – Electoral politics that functions as the political arm of the movement for "A" and locally appropriate subsets of "B" issues. In practical term, this may need to be an insurgency in the Dem ranks, or more organized Greens, plus coordination with other "third" parties that have a presence and ballot access in some places.

Then we work on ambrit's:

"You watch my back, I'll show up at your demonstration"

Adding: "We recruit candidates who understand your issues and have policy proposals to address them, you show up to vote".

DJG , March 26, 2017 at 3:10 pm

marym: Excellent comment.

I can't find much on the Light Brigades. Who are they?

And my issues at the universal level would be health care for all (with minimal fees and premiums), free education for all, an end to the endless wars, and, if I may have a fourth, expansion of Social Security with some big raises to recipients to give people a base income that they can retire on (or safely go into disability retirement). The money is there for all of these, but the political will consists of the likes of Paul Ryan and Nancy Pelosi.

Yes: You watch my back, and I'll watch your back. But "back" is defined broadly–we are all in this together.

Ancient 1 , March 26, 2017 at 10:25 pm

Good Comment. What bothers me is there is a lot of conversation about all our issues and proposed solutions, but I see no actions taking place. There are no leaders on the national level, other than Senator Sanders. We need a Socialist Huey Long with a big horn and perhaps a little action like, Act Up" to get things moving. There is going to be a revolt sooner or later. It will get to a point where ordinary people, especially our young, who will not take it anymore.

PH , March 26, 2017 at 5:58 am

Love Hudson, but no one is right about everything.

He accepts as an article of faith that it would be easier to start a new party than win primaries in Dem party. Not clear at all.

Also, while I agree Dems are dominated by Blue Dogs who want to use Wall Street money to run Repub lite candidates in purple states, and that their appeal to identity politics is manipulative and a way to deflect from economic issues, it does not logically follow that voters do not often think of themselves and their goals in terms of racism or religion or guns. Their are cultural "us v them" identities that have a powerful effect on politics.

I agree with Hudson's critique of FIRE and the problem of debt in our society. But it is not easy to explain to the general public - which would not recognize the acronym. And what exactly is the Hudson platform to address debt or FIRE now? I understand the argument (as I understand it) that 2009 was an opportunity to use bankruptcy of Wall Street to break up economic olarchy and write down debt for homeowners. I agree. I am angry and frustrated by the lost opportunity. I also understand the sly reference to having to wait for the next crisis to get another chance. Why do we have to wait? This is Hudson's concession that there is no general understanding of the debt problem or support for Willy-Nilly support for dismantling Wall Street or existing debt relationships.

I am convinced by Hudson that rising housing prices are a scam for loading debt on people and raising the burden of a rentier class. But most people who own houses are excited when you tell them housing prices are going up. What exactly should be our political message.

Some districts have strong evangelical communities and find abortion to be the top issue year in andvyear out. Some evangelicals stuck with Trump in the hope of a Supreme Court that will outlaw abortion. How to Dems or a new Hudson party win in those districts?

Politics is a fluid business. Forget coalition building (extremely tough), even finding a message for one voter (who may be of 2 or 3. Or 4 minds about the world, and change views daily, is tough.

In my view, a Progressive majority must be put together piece by piece, place by place, from the ground up. Bernie articulated a place to start. The Schumer crowd own the Dems now, but it is a fragile hold. We can beat them if we find common sense solutions to our problems and articulate those ideas to our neighbors. We need energy and hard work, but it is not clear that a third party is needed.

Carolinian , March 26, 2017 at 9:44 am

Why do we have to wait?

Because we have a political system–from the Fed to the Congress to the media–that is designed to keep current arrangements in place. Public complacency has allowed this to happen and now only another systemic breakdown is likely to force change on an entrenched elite and confused electorate. One might hope that the Democratic party would be the necessary force for reform but it's surely clear by now that its leadership intends to go down with the ship. Time for the rest of us to pile into the lifeboats (a third party). And even if one believes there is hope for the Dems, it's unlikely they will change without some serious threat to their power and that would be a viable third party. For much of the country's history there were lots of third parties and splinter movements which is what one would expect from such a diverse population. The duopoly is a very artificial arrangement.

Sanders should never have taken this third party threat off the table and it is why the Dem leadership doesn't take him seriously. It's also a reason for some of the rest of us to question his seriousness. "Don't want to be the Nader" isn't the sort of call to arms that has one putting up the Che posters.

Carolinian , March 26, 2017 at 11:40 am

Did Bernie have a big impact? The mainstream media mostly ignore him and the Dems go out of their way to ignore him by running Perez. And didn't the Bernie endorsed primary challengers in the last cycle do poorly?

You will only get the elites' attention by threatening their power, not their message. Obviously establishing a viable third party is extremely difficult which is why I agree with Hudson that it will take the next crisis to change things. Incrementalism has been shown not to work.

FluffytheObeseCat , March 26, 2017 at 12:33 pm

Perez only got 235 votes; Sanders' candidate Ellison got 200. The Democratic Party establishment did not "ignore" Sanders by running Perez. They were semi-desperately trying to block him (and his cohort) from advancing on a low rung on the ladder to power.

Primary challenges across the nation, in every city council and state assembly race. Again and again. Then on to the governorships and federal offices. This is the swiftest, least expensive and least damaging way to power for Sanders partisan. We could take over the party in under ten years if this tactic were widely deployed.

barefoot charley , March 26, 2017 at 1:32 pm

Wikileaks made it plain what the Democrats do to mavericks who win races without a party bit in their mouths. The corruption is institutional, it is their operatives' identity. A successful third party will be very difficult to achieve, but is perhaps possible. A useful Democratic party is not possible until every careerist is unemployed–ie until their employers run out of money. That can't come about, as long as there are empowered Democrats and Republicans.

Jeff W , March 26, 2017 at 4:16 pm

FluffytheObeseCat

Primary challenges across the nation, in every city council and state assembly race. Again and again. Then on to the governorships and federal offices. This is the swiftest, least expensive and least damaging way to power for Sanders partisan. We could take over the party in under ten years if this tactic were widely deployed.

I agree with this statement.

And it's happening: various groups (Our Revolution, Brand New Congress, Justice Democrats, and probably others) are planning primary challengers in just that way. And it's already happened at the local and district level in California. It's a different political environment than even just a few years ago and it will be even still more different when some (or, let's hope, many) of these candidates start winning.

Norb , March 26, 2017 at 9:48 am

The real problem is corporatism. The power to make decisions on public policy has been transferred from democratic government to corporations, run by oligarchs. Both political parties in the US are committed to this political arrangement. The thin veneer of democracy is used to check public dissatisfaction. In short order, even this facade will be deemed unnecessary and discarded. This consolidation of power was enabled by masking class consciousness. Worker aspirations mirror their corporate masters. Life consists of maximizing personal wealth in the form of money and possessions. Mass media provides the conduit to achieve this conditioning.

Trying to rebuild the Democratic party form within is a waste of energy and time that most citizens don't have. If anything, the existing political establishment has perfected the techniques and tools needed to make dissent impotent. This is largely accomplished by perpetuating the myth that change can occur by working within the existing system, and then undermining effective policy that would focus on worker interests. The chumps get scraps.

In the end, oligarchy is the cost that must be paid for our modern life of convenience and endless entertainment. Moving forward must be about rejection. Rejection of the current social and cultural order. A new party, a true workers party, is needed to restore equilibrium to the existing power imbalance. The mass of people who have dropped out of the workforce and electoral system are waiting for leadership to offer a better vision for the future. This vision is not forthcoming because the human imagination must turn outside the existing failed norms and seek new horizons removed from capitalist ideology. Political power follows or grows naturally from a social order, not the other way around. Imposed social orders are always unstable and need violence to maintain. A way of life determines the political possibilities. This is why those wanting change must always work outside the existing system, both mentally and physically.

Just as crony capitalist ideology turned the notion of individual freedom on its head to justify the greatest inequality known to human societies, the remedy centers on the rejection of exploitive violence. It is based on preservation, regeneration, and a spiritual awareness that one must give back to the world and not only take from it. To my mind, coalitions built on these principles stretch across all social groups. Spending time, money, and energy building these networks and infrastructure will be productive and longer lasting. Strikes, boycotts, and dropping out of the existing system sends a much more powerful message to the oligarchs. They will respond with violence, but then their true nature is open for all to see, making it easier for others to reject their ideology.

Capitalism was born of Feudalism. Individual rights superseding the rights of Kings. Nothing lasts forever. A post- capitalist world must be first envisioned and then articulated. Capitalism maintained the inequality and hierarchical use of violence of the previous system. This relationship forms most of the underlying root causes of intractable problems faced today. Egalitarianism provides a way and an alternative. Socialist ideas can be suppressed but never eradicated. Human social evolution points in this direction. Slavery will never return. The human spirt will not allow it.

two beers , March 26, 2017 at 1:26 pm

Your note has a 1930s sound to me. Spain, maybe.

What a cavalier and condescending dismissal. With an arrogant wave of the hand, history goes *poof*. And though you "agree" (how generous of you!) )with some of the symptoms Hudson identifies, you categorically deny what he identifies as the root systemic cause of those ills. Instead, a little modest, cautious, sensible, "piece by piece", "place by place" reform around the edges, and everything will work out just fine in its own time, because abortion.

You are an exemplary and model Democrat, and Exhibit A why left politics will never emerge from within the Democrat Party.

jrs , March 26, 2017 at 2:28 pm

although it may be an uphill climb now, striking and unionizing still sounds infinitely less pie in the sky and far more brass tacks and addressing some of the actual problems, than creating a 3rd party in the U.S.. If that is one's solution they have no right to criticize anyone on their proposals not being practical. At least striking has some history of actually working.

Norb , March 26, 2017 at 3:37 pm

It is the participation in our own destruction that I am trying to express and get my head around. Engagement by all means, but somehow the rules need to be changed.

The amount of time, energy, and resources needed to engage in effective politics today is prohibitive to most citizens. What Hudson is saying is that the two party system in America is broken and the only way forward is to start anew. I would tend to agree. In my lifetime, the Democratic party has been reforming for close to 40 years now. That is a long time to be ineffectual concerning worker's interests. The long dissent of the American workforce is reaching critical mass and some radical thinking and action is needed.

The left needs to develop some productive alternatives, which again Hudson points out. An egalitarian alternative needs to be articulated. Candidates running for office as socialists, espousing actual socialist ideals. Win or loose, speaking in public about socialist ideals can only help. Government sponsorship of small business and cooperatives over monopolistic corporations. Actually running and building sustainable communities. As was stated in comments, Sanders raised upwards of 240 million dollars during the last campaign. What is there to show for all that effort and resource depletion?

An actual show of distain for the elite ruling class for their crass barbarism and masked cruelty is a start. Followed by actually building something of lasting value.

FluffytheObeseCat , March 26, 2017 at 12:39 pm

The "masses of people who have dropped out of the workforce" are old, overweight, have multiple physical deficits and are hooked on at least 2 types of prescription dope. They will not be manning your nostalgia-draped barricades. Not ever.

jrs , March 26, 2017 at 2:34 pm

alrighty, everyone who can't get a job is overweight and a drug addict and unhealthy etc.. Get real. Old sometimes has something to do with it, just because companies do age discriminate in hiring.

tegnost , March 26, 2017 at 10:04 am

I agree with Hudson's critique of FIRE and the problem of debt in our society. But it is not easy to explain to the general public - which would not recognize the acronym.

People are not a miniscule fraction as stupid as you think they are, and I will posit that this is one of, if not the main problem with democrat loyalists such as yourself.

first you say this

"Also, while I agree Dems are dominated by Blue Dogs who want to use Wall Street money to run Repub lite candidates in purple states, and that their appeal to identity politics is manipulative and a way to deflect from economic issues,"

shorter, I realize democrats don't represent you, and that's too bad but you have no other option and PH doesn't want you to have another option.
followed by

" it does not logically follow that voters do not often think of themselves and their goals in terms of racism or religion or guns. Their are cultural "us v them" identities that have a powerful effect on politics."

Is this unmoored jab at rural identity not a double negative that can be rephrased "it logically follows that voters think of themselves in terms of racism or religion or guns"? and isn't that just another way of saying people are stupid and you are not because you can hide your class and race bias behind a double negative, and people being stupider than you will never know it because clever, but clever ain't working anymore, and isn't likely to start working any time soon.

You close with a call for incrementalism yeah that's worked really great for all of us in the hoi polloi, and you don't fail to mention abortion, the only democrat platform, and schumer et al's "fragile grip" is in reality an "iron law of institutions" grip and they and you are not going to let go.

"We can beat them if we find common sense solutions to our problems and articulate those ideas to our neighbors. We need energy and hard work, but it is not clear that a third party is needed."

so who is this "we" kemo sabe? I am in the veal pen. Come into the veal pen with me. We will be in the veal pen thanks but no thanks. I've had plenty of common sense discussions with my neighbors, and it's depressing as we all know none of those sensible policies will be enacted by the useless to the common citizen and enabler to the criminals on wall street democrat party, rotten to it's core.

Paul Greenwood , March 26, 2017 at 6:20 am

Федеральное агентство по управлению государственным имуществом (Росимущество) was what created Oligarchs under Yeltsin. It was headed by Chubais who helped make Khordorovsky and the rest of the Oligarchs incredibly rich. He then headed the 1996 Re-Election Campaign for Unpopular Yeltsin and bought victory and sold off State assets for nugatory worth.

Khordorovsky was to deliver Yukos to Exxon and let US interests control Russia's natural resources. Berezhovsky needed a "roof" – he had Chechens protecting his outside interests but once Yeltsin's liver gave out the KGB Siloviki would put The Family on trial so he found Putin as a Lieut-Col. with a background in St Petersburg where Chubais had been active for Sobchak also. Putin was the "roof" to keep the KGB from executing the looters for treason.

Like a new Tsar with Boyars, Putin had to find which were his "Oligarchs" and Berezhovsky turned his assets over to Abramovich who is Putin's man. Chubais now sits on CFR and JP Morgan Board for his good works.

jackiebass , March 26, 2017 at 6:56 am

Trump won on the slogan Make America Great. I live in upstate NY which is strong republican. These people thought the slogan meant great for them. That coupled with a bitter hate of Clinton made it easy for Trump to get their vote. A sad thing is that these voters are very uninformed and depend on what they know from corporate media especially FOX news. None of them know what Neoliberal means and that the root of their problems lie with neoliberal policies.

When I tell them that Obama and Cuomo aren't really democrats but moderate republicans they think I'm out of my mind. I tend to look at thing objectively based on verifiable facts.Most of these voters look at issues in an emotional way. They will say Obamacare is bad and need to be repealed. When you ask them how it's bad the best they can come up with is it forces you to buy insurance and you can't keep your own doctor. I guess what I'm saying is that the average voter is too lazy to get informed and relies on the political propaganda fed to them.

At 75 years old I don't see that the immediate future will change much. The only hope I see is in the young of our country. Unless someone or a movement can educate them about the evils that are destroying their future, democracy is dead. Because of how the economy is structured the economic future for most of the population is grim. They will not be able to afford to retire and will live in poverty. Perhaps this will wake them up. Unfortunately it will be too late for them.

UserFriendly , March 26, 2017 at 8:03 am

People are all sheep. No one thinks, they just vote based on emotions. I have never seen that more blatantly laid bare then in this one article.

HOW HIGH-END STUDENT COMPLEXES CREATED THE MOST GOP PRECINCT IN LEON COUNTY

Which ties in nicely with the slate star codex piece from yesterday.
GUIDED BY THE BEAUTY OF OUR WEAPONS

At best we can work at the margin on the handful of people that are capable of rational thought. Which is why nothing ever changes, appeals to emotion are always more potent than appeals to reason. There is no solution.

John Wright , March 26, 2017 at 9:45 am

I also agree that there is no solution, certainly not an evolutionary solution via EITHER of the two parties.

The big changes in the USA occurred during the Great Depression as financial reform was introduced, the idea of government infrastructure could provide employment and what I believe is little mentioned, an increased awareness on the part of many that their success was not achieved solely by their own efforts.

Many of the USA's post war corporate executives should have remembered that their families struggled during the thirties, and this may have made them more connected with their employees and communities.

Now we have a government of the internally connected top 10%, with the bottom 90% detached and watching from outside.

And CEO's and the executive class have loyalty only to their company's stock price.

The recent rehabilitation of serial screw-up George W. Bush and attempted elevation of serial screw-up Hillary Clinton is direct evidence that the political class does not care how much harm they do to the "deplorable" voters they appeal to every 2/4/6 years.

With the money sloshing around DC and the media control of content, how does one replace the leadership of both parties with more progressive people in any reasonable time frame?

Per Mark Blyth, Global Trumpism is the current response, but what will this morph into after Global Trumpism hangover manifests?.

sundayafternoon , March 26, 2017 at 10:57 am

I think although it may seem that only a small percent of the population is capable of rational thought I think this is actually not the case and its more productive (and optomistic) to think of this issue in terms of a behaviour rather than a fixed capability, like how some ancient Greek philosophers thought about moral behaviour or how some modern phychologists think about psychopathy. Almost everyone is capable of rational thought (or moral or psychopathitic behaviour) but its how often or more precisly in what situations an individual decides to engage in or deploy rational thought.

jrs , March 26, 2017 at 2:40 pm

Capable of rational thought really doesn't do much good for all the things one has no exposure to. Ok in this case they may have little real understanding of say leftists ideas. And I really think they don't. That may not be the case for the political junkies here for political ideas, but we all have our areas of things (not politics) we may have a similar stupidity about.

Katharine , March 26, 2017 at 11:23 am

Sorry, but I think that's way too disrespectful of other people and not realistic. All, save those with extreme mental disabilities, are capable of some degree of rational thought. That doesn't mean they can be quickly or easily convinced, but they will be more amenable to persuasion if you approach them as equals and open your mind to their reality in order to find the right terms with which to present your ideas. Bernie has shown himself to be very good at that, as are all good teachers. Those who insist on framing everything in their own terms without adapting their communication to another's experience will always get blank stares.

knowbuddhau , March 26, 2017 at 1:49 pm

Well said, Katharine.

Dehumanizing ("people are sheep") and dismissing our neighbors as incapable of rational (good?) thinking will get us nowhere. Like I've said, the propaganda is working when we're dividing and conquering ourselves. That horrid little word often seen in this context, "sheeple," is just another word for "deplorables."

People are not sheep. We've been psyop'd senseless. "Public relations" began around the turn of the 20th century. It was ramped up by orders of magnitude after WWII.

Gore Vidal quotes JFK as saying to him, we've entered an era in which "it is the *appearance of things that matters" (emphasis original in the TRNN video, The National Security State with Gore Vidal ). Psychology and other social sciences have been weaponized and turned against us. With a facile understanding of the human mind (as if it were nothing but a mere mechanism), immense effort has gone into controlling the inputs in order to control the outputs (behavior).

From How US Flooded the World with Psyops

Newly declassified documents from the Reagan presidential library help explain how the U.S. government developed its sophisticated psychological operations capabilities that – over the past three decades – have created an alternative reality both for people in targeted countries and for American citizens, a structure that expanded U.S. influence abroad and quieted dissent at home.

Today, "public opinion" is a Frankenstein's monster. Most of my fellow Americans believe in a world that never existed and doesn't exist right now. We can't even agree on what happened to JFK, or MLK, or what happened on 9/11/01.

Contra UF, it's not that people are incapable of rational thought; rather, the information we have is hopelessly corrupted. People are acting rationally, but the numerators and denominators have been faked. On purpose. Or did the Russians really do it?

Once again, TPTB thought they had found a magic method of machining people into permanent compliance. But they neglected the fact that relying on psyops drives people crazy. You just can't keep rejecting real reality and substituting a manufactured Narrative (looking at you, NYT) forever.

ISTM we're acting without sufficient contact with reality. The effort to control the population, the better to exploit us, has driven many of us mad. Neglecting the century or so of effort that's gone into manufacturing consent leads to blaming the victims.

Propagandists and PSYOPeratives have put out the people's eyes, and you berate them for their blindness?

sundayafternoon , March 26, 2017 at 7:23 pm

While I would absolutely agree with everything you've just said and believe the facts you've cited are the main reason for the bleak outlook for our species, how the myriad of lies fed to the population is received is a more complex process than just plain deception. People are incredibly complex and operate on a number of levels simultaneously. For instance the notion that universal health care or a strong union would be personally beneficial, or that the banking system is corrupt and that all the wars since 1945 have been unnecessary must be known to anyone with functioning eyes and ears on a relatively conscious level, but the majority have chosen to effectively overlook this reality I believe for reasons that ultimately feed in to human predispositions for conformity. It's ironic that our evolutionary highly successful nature of collectivism is now working against us as a species and leading to a destructive subservience that is almost sadomasochistic. If the population were to be unequivocally presented with reality I doubt many would tolerate the state we have now but conversely this would mean that the elite in our society had sanctioned truthfulness, so we would not really be going against the wishes of the powerful. Basically the fact that the powerful in our society have presented us with lies means lies are what they want us to believe, so dutifully most will oblige, however obviously at odds with reality those lies are.

Why such an overwhelming percent of the population do not vote in their own economic interest is because political affiliations seem to be a complex expression of self-identity, something which includes attitudes, social prejudices and 'beliefs' that are dependent on complex emotional interactions between internal and external events, and can include for instance a desire for status within your tribe, family loyalty, even sadistic impulses. I;m probably wrong about most of this but part of me cant help feeling some of the victims share a little of the blame

knowbuddhau , March 26, 2017 at 9:23 pm

>> For instance the notion that universal health care or a strong union would be personally beneficial, or that the banking system is corrupt and that all the wars since 1945 have been unnecessary must be known to anyone with functioning eyes and ears on a relatively conscious level, but the majority have chosen to effectively overlook this reality I believe for reasons that ultimately feed in to human predispositions for conformity.

You're projecting your knowledge and views, and then blaming people who don't see things your way. A majority supports single payer, yes, but the rest is wishful thinking.

If you read Zinn's A People's History of the US, you'll see that even WWII was a manufactured war. I'm willing to bet a majority still thinks we were attacked out of the blue on Pearl Harbor Day, despite FDR's plan to provoke Japan. Or that incinerating Nagasaki and Hiroshima ended the war and saved tens of thousands of US lives. There was an almost perfectly complete news blackout on the aftermath specifically so that opposition to the bombings couldn't form. There are endless examples like this.

We're not told what we need to know to govern ourselves. What we are told amounts to propaganda, sometimes explicitly so.

Yes, a lot of people have drunk the koolaid, some with gusto. Who's pouring it? You can blame the victims all you like. I blame the people who've deliberately set out to deceive us.

What our deluded brothers and sisters need is our compassion. It's hard to have compassion for someone trying to run you over for exercising your rights (been there, done that), but no one ever said it would be easy.

Kokuanani , March 26, 2017 at 7:55 am

The only hope I see is in the young of our country.

I think Trump, the Repubs and most of the Dems see that too. That's why they've promoted DeVos, Arnie Duncan, and all the other advocates of "charter schools," strangled public education, and attacked teachers.

UserFriendly , March 26, 2017 at 8:05 am

and decided college was a great opportunity to make debt slaves ...

Deadl E Cheese , March 26, 2017 at 8:56 am

The problem with this approach is that all this does is kill off liberal cosmopolitanism, not Marxism. Marxism doesn't need a widespread secondarily-educated population to spread. And it definitely does not need liberal cosmopolitanism as a stepping stone; quite the opposite, really. Just in the US, when the wobblies and Black Panthers started turning red, how many of their rank and file went to college or even finished high school?

Considering that the elites are using liberal cosmopolitanism to strangle Marxism (class-only Marxists want to throw women and nonwhites under the bus to get their single-payer and you, the woke liberal identitarian, must support capitalism to protect the marginalized), this strategy is not only pointless but it's also self-defeating.

NotTimothyGeithner , March 26, 2017 at 9:35 am

It's far more simpler. Charter schools are about following the money. Public schools have seemingly huge revenue streams. Why can't GE get a cut is the thought process? For profit Healthcare was forbidden until 1973 (thanks to Teddy), why not public schools?

NotTimothyGeithner , March 26, 2017 at 11:45 am

The HMO Act of 1973 (thanks Teddy and Tricky Dick; bipartisanship at its finest) made it easier to start and run HMOs which faced regulatory hurdles mostly due to financing. Non profits had an easier time of it hence Hospitals named "St X" or "X General." Since the hospital were non profits and employers made deals with the hospitals, health insurance was effectively non-profit. There were gaps, mostly in rural areas. Other changes from the HMO Act of 1973 encouraged profit seeking from denial of coverage to pushing unnecessary procedures or prescriptions.

There is a noticeable correlation between this act and the explosion of Healthcare costs. The Miller Center had a series on Nixon expressing doubts to the Kaiser about HMOs. The arguments played out just like charter schools today.

philnc , March 26, 2017 at 4:14 pm

I recall hearing the tape of a conversation among Nixon and his aides regarding HMOs. The audio, like most of the Johnson & Nixon tapes, was poor, but what did come through was Nixon's support for Kaiser's business model, summed up by Erlichman as, "the less care they give them, the more money they make."

https://millercenter.org/the-presidency/educational-resources/all-the-incentives-are-toward-less-medical-care

Huey Long , March 26, 2017 at 11:49 am

https://en.wikipedia.org/wiki/Health_Maintenance_Organization_Act_of_1973

Disturbed Voter , March 26, 2017 at 8:39 am

The US Left has been controlled opposition since 1950. There was never a chance it could provide a reasonable and effective alternative. FBI/CIA moles make sure they never will. The Democrats have never been true Left FDR didn't really betray his class, he saved them from their own stupidity.

Randall Stephens , March 26, 2017 at 9:42 am

"As Tanzanian President Julius Nyerere quipped in the 1960s, when he was accused by the US of running a one-party state, 'The United States is also a one-party state but, with typical American extravagance, they have two of them'."

OK, that made me laugh out loud.

Arizona Slim , March 26, 2017 at 10:07 am

I seem to recall that the identity politics of yore were lacking in solidarity. The antiwar protestors, some of whom were hippies, were beaten up by working class union members. Remember the hard hat riots? And the African American leadership of the Civil Rights era? Well, they were from the black churches​, and they thought that the hippies were uncouth.

Deadl E Cheese , March 26, 2017 at 10:13 am

The identity politics of today lack in solidarity, too. What with Hillary Clinton running the most ageist campaign in memory, Obama breaking the record on deportations, Bill Clinton blowing racist dogwhistles as hard he can and also helping to shepherd a police state that puts Thailand to shame, and the whole of the Democratic Party stoking Russophobia and neoconservative.

A cynic might say that liberal identity politics (as opposed to post-Frankfurt/Focault Marxist identity politics) was intentionally designed to do these things both in the 60-70s and now.

And I am that cynic.

Kukulkan , March 26, 2017 at 10:30 am

I don't see how antiwar protestors qualify as identity politics, since the group is defined by a policy concern, not by some quasi-biological tag. Same with working class union members; policy and economic interests, not tags.

I'd say the same about the African American leadership of the Civil Rights era, even though they did generally share the tag of being "black". They focused on a policy goal and welcomed those who didn't share the tag to participate in the struggle.

Identity politics are not the same thing as left-wing or progressive or liberal (or whatever you want to call it) politics. In very real sense, Identity politics are a form of anti-politics since they don't address interests, policy or allow any form of accommodation or reconciliation of different points of view.

Identity politics is about tags. Non-identity politics is about interests and policies.

Kukulkan , March 26, 2017 at 4:25 pm

But the focus is on the policy issues. The campaign for gay marriage was about getting gay marriage, not about being gay. And anyone who supported gay marriage was a part of that campaign - gay, straight, black, white, male, female; all the tags. It may have started with those who were gay, but it wasn't exclusive to the tag.

By contrast, Hillary's campaign was just about the tags. Not doing anything for those with the tags, or changing any policies, no matter how they affected various tags, or even addressing any issues that are important to one or more of the tags, just acknowledging the tags and verbally supporting pride in them. That's why even a bunch of people possessing the tags didn't support her: there was nothing there for them, or, indeed, anyone else outside the financial and imperial elite.

NotTimothyGeithner , March 26, 2017 at 12:12 pm

Abernathy and King were from black churches. The rest of the leadership came from the street or universities. King's lament about the "white moderate" was code for the "black church." Ministers were glorified house slaves and liked the big houses. Jim Crow worked for black ministers. If better of blacks moved to white neighborhoods and more importantly white churches, who would put money in the collection plate?

With the exception of Jackson when he showed up (he was young), those young black men who were always around King were Communists and atheists. They didn't broadcast it for obvious reasons, but a guy like Malcolm X was skeptical of King for real reasons.

Jackson was important because he forced the black churches to get with the program. If there was a minister successor to King, the congregants might ask questions about their own ministers.

The black church hated hippies, but the real civil rights leadership didn't.

SumiDreamer , March 26, 2017 at 10:10 am

The diagnosis is mostly correct. But omits the role class bigotry and affluenza with attendant celebrity culture and pursuit of prestige plays. Thus the prognosis and protocol go astray.

The wealthy and the politicians don't care about you/us. They care about maintaining any fiction that allows them to keep acquiring. Trump is not the problem; Mercer"s values are The Problem. Trump is the PERFECT reality TV/celebrity fantasy creature to keep the twisted Mercer chariot's wheels turning.

Bernie was NOT The Answer. Putting on a mask of concern does not take away the sorrows of empire. As long as the blatant US militarism and imperialism continues we cannot unite the working class. Everything it needs to flourish continues - mass incarceration, join the military or stay in the ghetto, graft and corruption of military/industrial/media complex, no respect for other cultures being swarmed, consumerism.

Bernie picked up Occupy"s talking points (good plagarist!) but left the hurdle of recognizing plutocracy the same as Occupy did. Plutocracy is democratic as well it just usnt!

What is there to show for 200 million in donations to overcome the Third Way? A new minuet with the crushing DemocRATic "party".

The war has come home. First step is to admit it. Consistency in VALUES is the left"s primary directive. There needs to be funerals for both parties not more illusion.

The tax break "fight" will be hilarious. Another example of how our rulers cannot solve a single problem .

The jobs plan: more prison guards, border agents, munitions makers, soldiers, cops, various bodyguards for the rich and the other useful mandarins to the affluenza-stricken is set in stone.

You cannot heal a chronic disease without seeing the entirety of its degenerative properties. We're fighting a nasty virus.

Mac na Michomhairle , March 26, 2017 at 12:34 pm

Bernie did not plagiarize Occupy. He had been saying the same things in Vermont for 25 years, but saying them in ways that lots of very various people connected with.

20 years ago, Bernie lawn signs used to be run over by irate people who knew he was a no-good dirty Socialist. But because he has consistently framed issues in terms of ordinary people's lives and because he has always been absolutely honest and forthright, most of those people who flattened the signs now like and respect him and vote for him. They also pay attention to issues that only no-good dirty Socialists do in most other states.

Denis Drew , March 26, 2017 at 10:20 am

"a revived protection of labor's right to unionize"

Do this and everything else will follow - don't do this and nothing will ever follow.

"It seems that only a new party can achieve these aims."

Don't depend on right or left parties. Depend on yourselves: rebuild American union density (6% unions in private economy analogous to 20/10 BP - starves every other healthy process). Both parties will come begging to your door.

Here's how to "do this":

[snip]
80 years ago Congress forgot to put criminal enforcement in the NLRA(a). Had union busting been a felony all along we would be like Germany today. Maybe at some point our progressives might note that collective bargaining is the T-Rex in the room - or the missing T-Rex .

The money is there for $20 jobs. 49 years - and half the per capita income ago - the fed min wage was $11. Since then the bottom 45% went from 20% overall income share to 10% - while the top 1% went from 10% to 20%.

How to get it - how to get collective bargaining set up? States can make union busting a felony without worrying about so-called federal preemption:

+ a state law sanctioning wholesalers, for instance, using market power to block small retail establishments from combining their bargaining power could be the same one that makes union busting a felony - overlap like min wage laws - especially since on crim penalties the fed has left nothing to overlap since 1935;

+ First Amendment right to collectively bargain cannot be forced by the fed down (the current) impassable road. Double ditto for FedEx employees who have to hurdle the whole-nation-at-once certification election barrier;

+ for contrast, examples of state infringement on federal preemption might be a state finding of union busting leading to a mandate for an election under the fed setup - or any state certification setup for labor already covered by NLRA(a) or RLA(a). (Okay for excluded farm workers.)
[snip]

PhilipL , March 26, 2017 at 11:14 am

Michael Hudson makes great points but I am still wrestling with his (and others) push back against so-called identity politics as it pertains to this perception of it splintering or at least limiting the Democratic party. The Dems are most certainly a party committed to the ideals of neoliberalism and corporatism. They did not lose this election based on "Russian hacking/emails" and other trite nonsense.

Nor did they lose it by appealing to so-called identity politics or tribalism. If the Left is going to move forward effectively it can't pretend we are merely having class and by extension economic arguments. Race is the thru line and has consistently been since the countries inception. Many things cited i.e. the New Deal, pro-Union policy, etc are standard bearers on the Left but have also been rife with racist treatment of potential Black and Latino allies. Why would that be ignored if we are only having conversations of class? Class does not explain redlining which has economic and social implications.

Access to universal healthcare is great and should be a goal but what does one do when the practice of medicine is still effected by race based/racial administration –> https://www.theguardian.com/science/2016/aug/10/black-patients-bias-prescriptions-pain-management-medicine-opioids

Acces to higher education and supposedly higher paying job with more opportunities is also great but that access is still shielded by exclusion that again is race based –> https://www.theatlantic.com/politics/archive/2014/05/african-americans-with-college-degrees-are-twice-as-likely-to-be-unemployed-as-other-graduates/430971/

These are complex issues, but they are not as class focused (solely) as many on the Left would like to believe. Our failure to speak honestly and openly about it and critique capitalism and its most malevolent (and seductive form neoliberalism) as being tied to the practice and idea of white supremacy is why we ultimately will find it more and more challenging to wage a successful countermovement against it.

Scylla , March 26, 2017 at 5:19 pm

Wow. Ok, so since racial bias was written into past economic policy that was intended to address class issues, addressing class based inequality should just be abandoned?

How about just demanding policy that addresses class based inequality simply be written without the racial bias? Why is this so difficult to get into the minds of liberals? This is not that hard.

Jason Boxman , March 26, 2017 at 11:21 am

The refusal to recognize is a nice idea. I've often thought of late that Democrats, or at least the Left, should refuse to recognize Trump's horrible cabinet appointments, even if the delegitimizing effect is minimal. Just referring to these people at citizen or whatever rather than secretary would be some small repudiation, at least.

Mel , March 26, 2017 at 12:22 pm

There's a very long and comprehensive musing on politics and public dialog at slatestarcodex. My takeaway: if your dialog is weaponized, if you consider your mission to be "How do I force these people to admit that I'm right?" then you'll keep seeing the same results we see now.

Tim , March 26, 2017 at 12:48 pm

Been saying #TrumpIsObamaLegacy since early morning in November. Yves was WAAAAY ahead of the curve back in late 08 calling that out. The Obama part of maintaining the looting of society status quo.

juliania , March 26, 2017 at 1:14 pm

The point about Trump being the US Yeltsin is one very much worth considering, if only because Russia, after much degradation and also suffering, has managed to begin to overcome those shameful and depressing times. May we do so also.

Blue Pilgrim , March 26, 2017 at 1:26 pm

Actually, his latest book is J is For Junk Economics
http://michael-hudson.com/2017/02/j-is-for-junk-economics-a-guide-to-reality-in-an-age-of-deception/

John k , March 26, 2017 at 1:51 pm

Great summary, forwarding to friends.
As commented above, progressive candidates that Bernie backed did not do well. Neolib always willing to boost funding for any candidate of any party if primary challenged by a progressive. Takeover of state party machinery e.g. Ca did have some success, but pretty slow.

Third party seems both the only way and imo more doable than many think unlike in the past, electorate is now desperate for real change. Third party impossible until probable. IMO we are now at just such a point.

But neolib will fight tooth and nail to keep a progressive party off the ballot....

Vatch , March 26, 2017 at 6:35 pm

progressive candidates that Bernie backed did not do well.

I'm not so sure about that. Here's the list of candidates backed by Our Revolution (not precisely the same as Sanders, but close). I didn't bother to do an exact count, but it appears that the winners exceed the losers by about 6 to 5.

https://ourrevolution.com/election-2016/

The Republicans control a majority of the state legislatures, governorships, and both houses of Congress. Compared to the establishment Democratic Party as a whole, the Sanders people in Our Revolution are doing pretty well. A new party isn't required; we just need some new people in charge of the Democratic Party. Heck, a lot of the same people could remain in charge, so long as they change their attitudes and stop obeying Wall Street and the billionaires.

Temporarily Sane , March 26, 2017 at 3:59 pm

Excellent piece. Americans have forgotten that the things they took for granted (40 hour week, humane working conditions, employer provided benefits etc.) were gained by the blood, sweat and tears of their forebears.

Today, as the attack on what's left of employee protections and benefits is ramped up, people are alienated from one another and encouraged to channel their despair and anger into blaming scapegoats or invest their energy stoking paranoid delusions about the illuminati and Russian agents. If that gets boring there's always alcohol and heroin to take the edge off.

The left has a momentous job – it has to convince people to give a shit and think of their fate as intertwined with others in a similar position. After decades of neoliberal economics empathy and giving a shit are associated with weakness and losers in many people's minds. Nobody wants to give a shit about anyone outside their preferred identity group or groups but everyone wants, demands , others give a shit about them.

It's almost comical how self-defeating and illogical people can be.

Gman , March 26, 2017 at 6:52 pm

Almost.

My belief is that Trump (and his kin) is likely the 'apotheosis' of neoliberalism or, as is far less likely, he (or they) might pleasantly surprise us.

Like Brexit in the UK, I for one, hopefully not mistakenly, mark this anti establishment ascendency as the beginning of the end of neoliberal economics rather than a further ringing endorsement ie I fully accept things may have to get worse before they get better.

People mostly vote to maintain a status quo they believe serves or may serve their interests in the future or, increasingly in the case of ever plausible (to the trusting and naïve) neoliberalism, out of misplaced hope, desperation, exasperation or understandable fear of the unknown.

The Clintons, the Obamas, the Blairs, possibly the Macrons, the Ruttes, even the Merkels of this world are wolves in sheep's clothing. They have come to represent, for increasing numbers, little better than managed decline in apparently safe hands, conducted in plain sight, in the ever narrower interests of the few.

Unfortunately events are conspiring to demand the once virtuous, now vicious, circle be broken by fair means or foul.

habenicht , March 26, 2017 at 8:57 pm

It seems that only a new party can achieve these aims. At the time these essays are going to press, Sanders has committed himself to working within the Democratic Party. But that stance is based on his assumption that somehow he can recruit enough activists to take over the party from Its Donor Class.

I suspect he will fail. In any case, it is easier to begin afresh than to try to re-design a party (or any institution) dominated by resistance to change, and whose idea of economic growth is a pastiche of tax cuts and deregulation. Both U.S. parties are committed to this neoliberal program – and seek to blame foreign enemies for the fact that its effect is to continue squeezing living standards and bloating the financial sector.

I couldn't have said it better myself. Its encouraging to know that minds like Hudson's are thinking in these terms.

Kirk , March 26, 2017 at 9:31 pm

Regarding the subject line of the article. I'd say that the Democratic Party has been the "paid loyal opposition" for quite a while. . . meaning they are paid to loose. Given the party's ties to Wall Street and Big Pharma it's pretty clear they mostly work for the same folks that own "mainstream" Republicans so their apparent fecklessness and inability to mount ANY sort of effective opposition, even when they are in the majority, shouldn't be any surprise.

The question might more appropriately be can EITHER party survive Trump? Frankly, one can only HOPE that the current version of the Democratic Party DOES go the way of the Whig Party. I can only hope that the Republicans stay as gridlocked as they currently are by the stupid faction of their party.

[Mar 26, 2017] They are an American Taliban: I have never read such a vitriolic comments section. Lots of Americans a seething mad.

Notable quotes:
"... The GOP and this administration are overwhelmingly self-avowed Christians yet they try to deny the poor to benefit the rich. This is not Christian but evil pure and simple. ..."
"... They are an American Taliban, just going about their subversion in a less overtly violent way. ..."
"... Much like Russian people viewed the country under Bolshevism, outside of brief WWII period. That's probably why we have Anti-Russian witch hunt now. To stem this trend. But it is the US neoliberal elite, not Russians, who drive the country to this state of affairs. By spending God knows how many trillions of dollar of wars of neoliberal empire expansion and by drastic redistribution of wealth up. And now the majority of citizens is facing substandard medical care, sliding standard of living and uncertain job prospects. ..."
"... US elections have been influenced by anyone with huge money or oil since the Cold War made an excuse for the US' trade empire enforced by half the world's war spending. ..."
"... The fake 'incidental' surveillance of other political opponents is a gross violation of human rights and the US' Bill of Rights. ..."
"... The disloyal opposition and its propagandists are running Stalin like show trails in their media... ..."
Mar 26, 2017 | economistsview.typepad.com
reason , March 25, 2017 at 03:01 PM
I just read this:

https://www.washingtonpost.com/news/wonk/wp/2017/03/25/why-republicans-were-in-such-a-hurry-on-health-care/?utm_term=.590e103e2761

I have never read such a vitriolic comments section. Lots of Americans a seething mad.

reason -> reason... , March 25, 2017 at 03:03 PM
By mad - I mean angry. And at the Republican party more than Trump.
libezkova -> reason... , March 25, 2017 at 05:10 PM
I like the following comment:

Farang Chiang Mai, 7:39 PM EDT

The GOP and this administration are overwhelmingly self-avowed Christians yet they try to deny the poor to benefit the rich. This is not Christian but evil pure and simple.

I would love to see this lying, cheating, selfish, crazy devil (yeah, I know I sound a bit OTT but the description is fact based) of a president and his enablers challenged on their Christian values.

They are an American Taliban, just going about their subversion in a less overtly violent way.

libezkova -> libezkova... , March 25, 2017 at 05:31 PM
An interesting question arise:

Are the people who consider our current rulers to be "American Taliban" inclined to become "leakers" of government activities against the citizens, because they definitely stop to consider the country as their own and view it as occupied by dangerous and violent religious cult?

Much like Russian people viewed the country under Bolshevism, outside of brief WWII period. That's probably why we have Anti-Russian witch hunt now. To stem this trend. But it is the US neoliberal elite, not Russians, who drive the country to this state of affairs. By spending God knows how many trillions of dollar of wars of neoliberal empire expansion and by drastic redistribution of wealth up. And now the majority of citizens is facing substandard medical care, sliding standard of living and uncertain job prospects.

ilsm -> libezkova... March 26, 2017 at 05:42 AM

I see the angst over Sessions talking to a Russia diplomat twice as a red herring.

US elections have been influenced by anyone with huge money or oil since the Cold War made an excuse for the US' trade empire enforced by half the world's war spending.

The fake 'incidental' surveillance of other political opponents is a gross violation of human rights and the US' Bill of Rights.

The disloyal opposition and its propagandists are running Stalin like show trails in their media.....

[Mar 26, 2017] The story of working class and lower middle class turning to the far right for help after financial oligarchy provoke a nationwide crisis and destroy their way of life and standards of living is not new

Mar 26, 2017 | economistsview.typepad.com
libezkova , March 26, 2017 at 04:03 PM
Trump victory was almost 30 years in the making, and I think all presidents starting from Carter contributed to it.

Even if Hillary became president this time, that would be just one term postponement on the inevitable outcome of neoliberal domination for the last 30 years.

I think anybody with dictatorial inclinations and promise to "drain the swamp" in Washington, DC now has serious changes on victory in the US Presidential elections. So after Trump I, we might see Trump II.

So it people find that Trump betrays his election promised they will turn to democratic Party. They will turn father right, to some Trump II.

Due to economic instability and loss of jobs, people are ready to trade (fake) two party "democracy" (which ensures the rule of financial oligarchy by forcing to select between two equally unpalatable candidates) that we have for economic security, even if the latter means the slide to the dictatorship.

That's very sad, but I think this is a valid observation. What we experience is a new variation of the theme first played in 1930th, after the crash of 1928.

The story of working class and lower middle class turning to the far right for help after financial oligarchy provoke a nationwide crisis and destroy their "way of life" and standards of living is not new. In 1930th the US ruling class proved to be ready to accept the New Deal as the alternative. In Germany it was not.

Please read

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

to understand that.

Now the neoliberal oligarchy wants to go off the cliff with all of us, as long as they can cling to their power.

[Mar 26, 2017] In addition to the public option and age 55+ Medicare buy-in, one thing that might work is abollishing the mandate and penalty and replaciing them with automatic enrollment. Call it Youre employed, youre covered!

Mar 26, 2017 | economistsview.typepad.com
New Deal democrat -> Lee A. Arnold ...

One issue going forward is whether the Dems should offer their own plan. I think they should.

As a few others have pointed out, Trump is not wedded to the GOP establishment. If he thinks he can "WIN bigly!" by allying with Dems, he will do so. I happen to think that he is mainly against "Obamacare" because Obama humiliated him at the White House Correspondents' Dinner once upon a time, and he is nothing if not vengeful. He wants to obliterate Obama's legacy.

So Dems need to make a big stink any time Trump administrativley undercuts Obamacare provisions to try to make it fail. But also they should give him the chance to do something he can call Trumpcare that actually works.

Obamacare does have some major problems (the individual mandate is hated, and the penalty isn't big enough. More young people need to buy in. Some of the Exchanges and health care provider networks are too narrow.

In addition to the "public option" and age 55+ Medicare buy-in, one thing that might work is abollishing the mandate and penalty and replaciing them with automatic enrollment. Call it "You're employed, you're covered!"

Just like SS, Medicare, unemployment and disability deductions to paychecks, establish a Health Care automatic deductible. If your employer offers healthcare, the deductible is reduced by the amount of the premium, all the way to zero if applicable.
If your employer doesn't offer healthcare, if you are under age 40, you are automatically enrolled in the least expensive Bronze plan in your state. If you are 40 or older, you are automatically enrolled in the least expensive Silver plan in your state.

The deductible would also include a small contribution towards Medicaid. Then, if you are unemployed, you are automatically enrolled in Medicaid, but can continue with the silver or bronze plan as above if you choose.

Dems could turmpet such a plan to "Reform and Improve" Obamacare, and campaign on pushing for it if they get a Congressional majority. Call it Trumpcare and President Caligula might sign on.

Reply Saturday, March 25, 2017 at 07:35 AM Lee A. Arnold , March 25, 2017 at 04:48 AM
"Medicare for all" may be the best battle cry. 65-70% of the U.S. people want a single-payer. Bernie Sanders has effectively destroyed the old Democratic Party and sits in a commanding position as spokesman, he gets 6 TV cameras with an hour's notice and he is probably the most popular politician in the U.S. The Democrats don't have to push it for now, they can wait for news to develop. This is all on the Republicans. Let the managerial disaster of Trump and the utter immorality of the "Freedom Caucus" sink in a little more, this story has "legs" as they say in show biz.
mulp -> Lee A. Arnold ... , March 25, 2017 at 04:48 AM
Name the Senators, representatives, and governors Bernie Bros have delivered?

Where are the Bernie Bros Newts, Cruz, Marcos, ...?

I'm in my 70th year. Conservatives attacked liberals in the 60s, my youth, as promising free lunches to gain power. But what they really hated was liberals convinced voters to tax all voters to pay for the things most voters wanted everyone to have, BASED ON SOUND ECONOMICS TO MAXIMIZE EFFICIENCY AND WELFARE.

Friedman led the effort to distort theory to eliminate the broad meaning of general welfare in economics. He did it by eliminating the hard connection between labor cost and gdp. He argued that labor costs and consumption can be cut to increase profits, and that contrary to theory, higher profits is more efficient.

Laffer applied operations theory to taxes, as if government was taxing to maximize profits.

Thus supply side theory of profit maximization. The result delivered was the imperative to cut taxes. To cut labor costs. Thus they argued that every economic measure improves if taxes and wages are cut.

Reaganomics would deliver more stuff at lower cost, higher profut, and that makes everyone better off, especially those in poverty. Friedman saw consumption as a bad thing. He wanted higher gdp, less consumption. In other words, he rewrote Adam Smith attack on mercantile economics into a justification of returning to mercantile economic policy.

So, who do Bernie Bros offer as the Milton Friedman and Laffer to create an intellectual foundation to refute Adam Smith, FDR, Keynes, Galbraith, are return to hunter gatherer economics? Who is the economist who can convince us that Marxist economic theory will work, as long as it's not captured by right wing capitalists like Fidel Castro, Chavez, Stalin, Lenin, the founders of Israel, ....

Bernie certainly must be influenced by the same economic theory that created Israel. It grew from the same Marxist roots in Germany that powered Stalin and Lenin. Bernie is a pre-WWII Zionist as best I can tell.

Why wouldn't Bernie deliver Israel governance to the US? How would he prevent the greedy from joining the Movement?

And Israel has the social welfare state system Bernie wants. Hundreds of thousands of men do not work so they can study supported by welfare. Universal health care. Women are very equal in status.

I grew up heating the Zionist Dream, theory, much like Bernie did, but from conservative Indiana. Seemed very idealist virtue becoming reality in the 50s and 60s. I have often used Israel as the example of a good universal health care system, of education, of welfare. Never heard Bernie say, "I want the US to be like Israel." Why not? Why Sweden?

jonny bakho , March 25, 2017 at 04:54 AM
Frank is wrong. What the GOP establishment dislikes most about Obamacare is the taxes on the wealthy. Medicare for all would have to be paid for by taxes on the wealthy or substantial payroll tax increases on the working class.
This does not meet GOP or Trump objectives for tax cuts on the wealthy.
The TV and radio talk uses Obamacare bashing to sell ads. They can easily change the subject to some other click bait.
Medicare for all? NaGonnaHappN
RC AKA Darryl, Ron -> jonny bakho... , March 25, 2017 at 05:14 AM
Frank was not suggesting that the GOP establishment would support Medicare for all. Frank was suggesting that Trump would essentially change parties to become a Democrat. As dubious as that notion is, more importantly it is premature. If Democrats win back both chambers of Congress, then it would at least be mechanically possible if still extraordinarily dubious. Mostly though Frank was just reaching for something worth saying. Now is a tuff time for commentary on the political economy.
Lee A. Arnold -> jonny bakho... , March 25, 2017 at 06:10 AM
Jonny Bakho: "Medicare for all would have to be paid for by taxes"

Theoretically you don't have to raises taxes if you get private insurers out of the game. They are a big expense, and give no value-added.

Doesn't mean that is politically possible, with Trump and a GOP Congress. But Trump and a Democratic Congress? I couldn't predict. Keep in mind that this man is almost an ideological vacuum, no managerial skills, has no constant concerns for anything except keeping himself in the spotlights, to be loved. And he just learned that the Freedom Caucus is implacably nuts.

RC AKA Darryl, Ron -> Lee A. Arnold ... , March 25, 2017 at 07:30 AM
"They are a big expense, and give no value-added."

[Someone has to do claims processing. The resistance against growing the federal payroll is an unnecessary hurdle for Medicare for all (MFA) to jump. Better administer it more like Medicaid. Let insurance companies handle the operations for a fee. Federal claim payments are handled on a pass thru. Then let the operational administration default to the MFA supplemental plan carrier if the insured has one, else the lowest cost carrier in the insured's state. For MFA clients then there could be a single claims process for providers even for patients with both MFA and MFA supplemental policies. That lowers the hurdle for MFA to leap over the insurance company lobby as well.]

RC AKA Darryl, Ron -> Lee A. Arnold ... , March 25, 2017 at 11:29 AM
Most of health insurance claims processing has been automated for a long time. Still it takes a lot of worker-hours to reconcile the errors.

Imagine how many worker hours it will take to reconcile liabilities for the first multi-car multi-fatality pile up of robot cars on the LA freeway. It will not matter that in total there have been less collisions and less fatalities when the big one hits. Computers are incapable of intuitive judgement which leads to blunders of potentially a colossal scale occurring that could have easily been foreseen by a human. To err is human but it takes a computer to really screw things up beyond all recognition. It is just a matter of time and time is always on Murphy's (that which can go wrong will go wrong) side. I know that myths about computers that never make mistakes and never need to be programmed again abound and I am sure that they will still be with us 20,000 years from now, when we are not even in any memory banks. I spent my entire career about to be replaced by software, but I was finally laid off because of administrative concerns with regards to legacy managed employees in context of the re-compete of the NG/VITA outsourcing contract (which is far less catchy). Computers have the potential to speed transit and reduce fatalities, but that potential will not be permanently realized as long as people are intent upon removing all human control and intervention. Computers can be capable copilots under almost all circumstances, but their owners cannot weather the fallout from their inability to conceive a response on their own when confronted with conditions that they were not programmed for. Such dramatic consequences will eventually raise a great furor, horror, deep sorrow, and extensive liability concerns. Even if you could sue a computer it is unlikely that they could demonstrate the means to pay. Incarceration of a computer for criminal negligence seems a bit ludicrous as well. The owner of the offending property better have their insurance premiums all paid up, but what then? Who will insure the next owner? Advocates of computer driven cars are planning on no fault insurance being mandated in each and every state. Good luck with that.

My wife works for Anthem although not in claims processing. She used to work in membership which is also automated. Software developers for health insurance mostly use Agile methods. One facet of that is that they only expect automation to handle roughly 90% (ideally more) of the workload because they have learned that there will never be a no defects computer system and they are saving expensive labor time in development by allowing lower paid workers to pick up a lot of the more complicated cases manually. That reduces time spent in the iterative process of testing and correcting defects. I am sure that you remember the problems with the ACA's automated insurance membership market. Stuff happens all the time in IT.

It is not that I had to work in IT for 47 years to understand the limitations. Merely my childhood education on the mathematical system of logic that underlies their circuitry and programming would have been sufficient, but a bit of empirical confirmation never hurts. Understanding reality is unfortunately a pre-requisite, but once that is accomplished then there are great opportunities to achieve improved results. Computers are not the problem, but can often be an essential part of the solution rather than a faceless soulless panacea. Does not compute can happen anywhere, but worse though when it happens at 75 MPH.

Lee A. Arnold -> mulp... , March 25, 2017 at 11:27 AM
Every serious study that looks at current costs in the multipayer healthcare insurance concludes that moving to single-payer will save 15-20% of total spending. Here is yet another one:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4283267/
RC AKA Darryl, Ron -> Lee A. Arnold ... , March 25, 2017 at 11:40 AM
There is nothing about that paper that would not hold true or even truer of a two tiered system of Medicare for all with administrative processing collocated with the supplemental insurer whenever there is one. Just do a work flow model and note how many steps are cut out at each the provider and insurer if primary and secondary coverage administrative processing for membership, claims, and policy holder services are collocated.
RGC -> jonny bakho... , March 25, 2017 at 11:40 AM
Government Funds 60% of U.S. Healthcare Costs - Far Higher than Previously Believed

"We Pay for National Health Insurance but Don't Get It"

"Universal coverage is affordable - without a big tax increase," continued Dr. Himmelstein. "Because taxes already fund 60% of health care costs, a shift about the size of the recent tax cut ($130 billion a year) from private funding to public funding would allow us to cover all the uninsured and improve benefits for everyone else. Insurers/HMOs and drug companies buy-off our politicians with huge campaign contributions and hordes of lobbyists."


http://www.pnhp.org/news/2002/july/government_funds_60.php

RGC -> Chris G ... , March 25, 2017 at 08:04 AM
Beyond the Affordable Care Act: A Physicians' Proposal for Single-Payer Health Care Reform

During a transition period, all public funds currently spent on health care – including Medicare, Medicaid, and state and local health care programs – would be redirected to the unified NHP budget. Such public spending – together with tax subsidies for employer-paid insurance and government expenditures for public workers' health benefits – already accounts for 60% of total U.S. health expenditures.28 Additional funds would be raised through taxes, though importantly these would be fully offset by a decrease in out-of-pocket spending and premiums.

http://www.pnhp.org/nhi

RGC -> RC AKA Darryl, Ron... , March 25, 2017 at 08:04 AM
Is Donald Trump still 'for single-payer' health care?


"Perry said Trump is "for single-payer health care."


Fifteen years ago, Trump was decidedly for a universal healthcare system that resembled Canada's system, in which the government pays for care for all citizens.

Recently, he's said he admires Scotland's single-payer system and disses the Affordable Care Act as incompetently implemented.

However, a Trump spokesman denied that the candidate supported "socialized medicine" and suggested Trump prefers a "free-market" solution. Other than that, though, the Trump campaign has been silent about what his specific health care policies are; perhaps Trump will be pressed on this point during the Aug. 6 debate.

Given the current evidence, Perry's attack is partially accurate, but leaves out details. We rate the statement Half True.

http://www.politifact.com/truth-o-meter/statements/2015/aug/02/rick-perry/donald-trump-still-single-payer-health-care/

[Mar 26, 2017] The good news is they now own health care. They now own Obamacare said Trump

Mar 26, 2017 | economistsview.typepad.com
Fred C. Dobbs , March 25, 2017 at 07:35 AM
In a Call to The Times, Trump Blames Democrats for the
Failure of the Health Bill https://nyti.ms/2nNPHD9
NYT - MAGGIE HABERMAN - MARCH 24, 2017

WASHINGTON - Just moments after the Republican plan to repeal and replace the Affordable Care Act was declared dead, President Trump sought to paint the defeat of his first legislative effort as an early-term blip.

The House speaker, Paul D. Ryan, was preparing to tell the public that the health care bill was being withdrawn - a byproduct, Mr. Trump said, of Democratic partisanship. The president predicted that Democrats would return to him to make a deal in roughly a year.

"Look, we got no Democratic votes. We got none, zero," Mr. Trump said in a telephone interview he initiated with The New York Times.

"The good news is they now own health care. They now own Obamacare."

Mr. Trump insisted that the Affordable Care Act would collapse in the next year, which would then force Democrats to come to the bargaining table for a new bill.

"The best thing that can happen is that we let the Democrats, that we let Obamacare continue, they'll have increases from 50 to 100 percent," he said. "And when it explodes, they'll come to me to make a deal. And I'm open to that."

Although enrollment in the Affordable Care Act declined slightly in the past year, there is no sign that it is collapsing. Its expansion of Medicaid continues to grow.

In a later phone interview with The Times, the Senate minority leader, Chuck Schumer, ridiculed Mr. Trump's remarks about Democrats being at fault.

"Whenever the president gets in trouble, he points fingers of blame," Mr. Schumer said. "It's about time he stopped doing that and started to lead. The Republicans were totally committed to repeal from the get-go, never talked to us once. But now that they realize that repeal can't work, if they back off repeal, of course we'll work with them to make it even better."

Mr. Trump said that "when they come to make a deal," he would be open and receptive. He singled out the Tuesday Group moderates for praise, calling them "terrific," an implicit jab at the House Freedom Caucus, which his aides had expressed frustration with during negotiations. ...

Fred C. Dobbs -> Fred C. Dobbs... , March 25, 2017 at 08:02 AM
On health-care, as on so much else,
President Trump passes the buck, reports
https://www.theatlantic.com/politics/archive/2017/03/the-buck-doesnt-stop-here-anymore/520839/
The Atlantic - David A. Graham - March 24, 2017

Speaking in the Oval Office Friday afternoon, President Trump surveyed the wreckage of the Obamacare repeal effort and issued a crisp, definitive verdict: I didn't do it.

The president said he didn't blame Speaker Paul Ryan, though he had plenty of implied criticism for the speaker. "I like Speaker Ryan. He worked very hard," Trump said, but he added: "I'm not going to speak badly about anybody within the Republican Party. Certainly there's a big history. I really think Paul worked hard." He added ruefully that the GOP could have taken up tax-reform first, instead of Obamacare-the reverse of Ryan's desired sequence. "Now we're going to go for tax reform, which I've always liked," he said.

As for the House Freedom Caucus, the bloc of conservatives from which many of the apparent "no" votes on the Republican plan were to come, Trump said, "I'm not betrayed. They're friends of mine. I'm disappointed because we could've had it. So I'm disappointed. I'm a little surprised, I could tell you."

The greatest blame for the bill's failure fell on Democrats, Trump said.

"This really would've worked out better if we could've had Democrat support. Remember we had no Democrat support," Trump said. Later, he added, "But when you get no votes from the other side, meaning the Democrats, it's really a difficult situation."

He said Democrats should come up with their own bill. "I think the losers are Nancy Pelosi and Chuck Schumer, because they own Obamacare," he said, referring to the House and Senate Democratic leaders. "They 100 percent own it."

Trump was very clear about who was not to blame: himself. "I worked as a team player," the president of the United States said, demoting himself to bit-player status. He wanted to do tax reform first, after all, and it was still early. "I've been in office, what, 64 days? I've never said repeal and replace Obamacare within 64 days. I have a long time. I want to have a great health-care bill and plan and we will."

Strictly speaking, it is true that Trump didn't promise to repeal Obamacare on day 64 of his administration. What he told voters, over and over during the campaign, was that he'd do it immediately. On some occasions he or top allies even promised to do it on day 1. Now he and his allies are planning to drop the bill for the foreseeable future.

It is surely not wrong that there is lots of blame to go around. Congressional Republicans had years to devise a plan, and couldn't come up with one that would win a majority in the House, despite a 44-seat advantage. The House bill was an unpopular one, disliked by conservatives and moderates in that chamber; almost certainly dead on arrival in the Senate; and deeply unpopular with voters. Even before the vote was canceled, unnamed White House officials were telling reporters that the plan was to pin the blame on Ryan. ...

The Republicans fold and
withdraw their health-care bill https://www.theatlantic.com/politics/archive/2017/03/trump-republicans-failure-obamacare/520788/
The Atlantic - Russell Berman - March 24, 2017

... Defeat on the floor dealt Trump a major blow early in his presidency, but its implications were far more serious for the Republican Party as a whole. Handed unified control of the federal government for only the third time since World War II, the modern GOP was unable to overcome its internecine fights to enact a key part of its policy agenda. The president now wants to move on to a comprehensive overhaul of the tax code, but insiders on Capitol Hill have long believed that project will be an even heavier lift than health care.

As the prospect of a loss became more real on Friday, the frustrations of GOP lawmakers loyal to the leadership began to boil over. "I've been in this job eight years, and I'm wracking my brain to think of one thing our party has done that's been something positive, that's been something other than stopping something else from happening," Representative Tom Rooney of Florida said in an interview. "We need to start having victories as a party. And if we can't, then it's hard to justify why we should be back here."

Nothing has exemplified the party's governing challenge quite like health care. For years, Republican leaders resisted pressure from Democrats and rank-and-file lawmakers to coalesce around a detailed legislative alternative to Obamacare. That failure didn't prevent them from attaining power, but it forced them to start nearly from scratch after Trump's surprising victory in November. At Ryan's urging, the party had compiled a plan as part of the speaker's "A Better Way" campaign agenda. Translating that into legislation, however, proved a much stiffer challenge; committee leaders needed to navigate a razor's edge to satisfy conservatives demanding a full repeal of Obamacare and satisfy moderates who preferred to keep in place its more popular consumer protections and Medicaid expansion. They were further limited by the procedural rules of the Senate, which circumscribed how far Republicans could go while still avoiding a Democratic filibuster. ...

[Mar 26, 2017] Our constitutional dollar democracy with its gerrymandering, limitless congressional revolving doors, SCOTUS unanswerable to the electorate, and first past the post voting provides loads of punch lines, not the least of which is the de facto two party system itself. Two competitors is merely duopoly

Mar 26, 2017 | economistsview.typepad.com
RC AKA Darryl, Ron -> ilsm... , March 25, 2017 at 07:09 AM
There is more than one joke. Our constitutional dollar democracy with its gerrymandering, limitless congressional revolving doors, SCOTUS unanswerable to the electorate, and first past the post voting provides loads of punch lines, not the least of which is the de facto two party system itself. Two competitors is merely duopoly. It takes a minimum of three viable choices to have any returns from competition that are significant to the consumers' preferences. Two competitors merely play off each other in predictable and increasingly ossified patterns.
New Deal democrat -> RC AKA Darryl, Ron... , March 25, 2017 at 07:17 AM
One very big quibble: >>SCOTUS unanswerable to the electorate<<

As bad as the SCOTUS can be, it would be unimaginably worse if it were subject to elections.

The big problem is that the Founders did not imagine life expectancies into the 80s. Throughout the 19th Century, the median time on the bench was about 14 years, and about 1/3 of all Justices served less than 10 years -- they got sick or died. Now the median time on the bench is 25 years, which is totally unacceptable.

If SCOTUS terms were set at 18 years, with a new Justice appointed every 2 years, independence would be preserved without the imposition of the "dead hands." Emeritus Justices could continue to serve on the appellate courts, and provisions would have to be made for deaths or retirements during the 18 year terms, but you get the idea.

RC AKA Darryl, Ron -> New Deal democrat... , March 25, 2017 at 07:36 AM
I did not mean elections. One of my favorite planks of the 1912 Bull Moose Party was the right for popular petition and referendum to overturn an unpopular SCOTUS decision. Roe V. Wade could not be overturned by referendum (which some fear but votes are measured by heat count rather than audible volume). Citizen United would be overturned by referendum. I trust democracy more than most, but still I don't get silly about it.

OTOH, SCOTUS term limits are also a good idea.

RC AKA Darryl, Ron -> RC AKA Darryl, Ron... , March 25, 2017 at 07:38 AM
"...heat count..."

[No, HEAD count. If votes were measured by heat count then Bernie Sanders would be POTUS now.]

[Mar 26, 2017] Democrats are a joke for refusing to sack a sclerotic, corrupt, and inept congressional leadership that had lost three straight elections

Mar 26, 2017 | economistsview.typepad.com
ilsm -> RC AKA Darryl, Ron... , March 25, 2017 at 09:06 AM
cnn resembles deep red tea party fox news..... and the run of the mill dems should fit their tri-corn hats
RC AKA Darryl, Ron -> ilsm... , March 25, 2017 at 09:37 AM
I will take your word for it. We don't watch either CNN nor Fox News at my house. Mostly we watch local (same news and weather crew here appears on each the WWBT/WRLH local NBC/Fox affiliates) news with some sampling of MSNBC and Sunday morning ABC and CBS shows along with the daily half hour of NBC network following the evening local. Cable news is sort of an oxymoron given the prevailing editorial slants. The now retired local TV news anchor Gene Cox laid the groundwork for the best news team in central VA by setting a high bar at his station. Gene laid it all out southern fried with satirical humor and honesty unusual in TV news.
RC AKA Darryl, Ron -> RC AKA Darryl, Ron... , March 25, 2017 at 09:38 AM
Maybe more sarcasm than satire, but the point is the same - wit and honesty.
JohnH -> Chris G ... , March 25, 2017 at 07:52 AM
Apparently we have two jokes alternating to lead America: the Republican jokes vs. the Democratic jokes.

But Democrats are right to expect that, when two jokes vie for power, their turn as joke in power will eventually come.

JohnH -> mulp... , March 25, 2017 at 07:52 AM
Maybe a post mortem would simply reveal that Democrats should have had a coherent economic message and pursued a strategy of standing up for working America for the past 8 years. For example, having Pelosi demand votes on increasing the minimum wage as often as Ryan demanded votes on killing Obamacare...

Any honest post mortem would have revealed that standing with billionaires and the Wall Street banking cartel--and not prosecuting a single Wall Street banker--is not a winning strategy...

Chris G -> JohnH... , March 25, 2017 at 12:33 PM
That Pelosi did not resign immediately following the 2016 election or, not having offered her resignation, that Congressional Democrats did not demand it is an indication that the party still has deep-rooted problems. (Pelosi may not be the cause of those problems but given how badly they've fared since 2010 she's clearly not the solution. She has no business remaining as minority leader.) I'm fine with Perez as DNC chair but Ellison should be minority leader.

[Mar 26, 2017] Staggering cost of Finance Sector under neoliberalism

Notable quotes:
"... Originally published at the Tax Justice Network ..."
"... US finance sector is a net drag on their economy ..."
"... It is a cleverly worked out system for wealth transfer. Complex laws, political backing and protection even if you break the law. At least in the old days when you got robbed you had the signal of having a pistol pointed at you. The modern version, with all the insider media psyops, leaves those who are preyed upon feeling that they are the ones to blame. ..."
"... The business model is straight out of the Cosa Nostra playbook – except there is media, political and legal backing. ..."
"... As an Italian friend of mine (who rarely goes north of 14th Street) once remarked, "The difference between the Mafia and bankers is that the Mafia always leaves a few crumbs on the table." ..."
"... Did I hear that right – the private finance sector will have cost us (in the US) 23Tr$ by 2020. And from 1990 to 2005 big finance cost us (already) 14Tr in fees, pay, fraud, misallocation and lost productivity. Yet we continue to deregulate even though all governments know how destructive deregulated finance is. ..."
"... yes, the EU does seem to be hungry to grab up all that finance for itself I keep thinking about Schaeuble coming to NYC c2012 and holding an impromptu news conference wherein he said it was fine with him if some banks went down because "we are overbanked." But we do have to admit that "overbanked" is an understatement since there are no productive investments and it's just self-defeating. I mean, how long can this go on? ..."
"... I don't know, how much money do you have left? ..."
"... It pays to remember that prior to 2008, hot (sovereign state backed) money flowed unimpeded like water across all EU borders, regardless of regulation, in search of quick handsome and easy returns, and much of it from subsequently bailed out by the ECB backdoor major lenders in France and Germany lending recklessly to poorer EZ members. ..."
"... The lasting results of this and its hasty, damaging retreat and the inequitable socialisation of the debt across the EZ are, of course, still being felt today. ..."
"... One of the major causes of the financial crisis was lax global regulation period. So let's not kid ourselves that by removing the UK from the European Union equation it is suddenly going to render it a bastion of sound prudential banking practice, particularly given various members recent comments that they intend to do anything in their power to tempt a post Brexit UK's financial services at the earliest opportunity. ..."
"... I do subscribe to the belief that the UK financial services sector has been and still is toxic to its economy and long-term future, and without a doubt this informed the Brexit vote, albeit in some cases on a subconscious level. ..."
Mar 26, 2017 | www.nakedcapitalism.com
Posted on March 25, 2017 by Yves Smith Originally published at the Tax Justice Network

In our March 2017 Taxcast: the high price we're paying for our finance sectors – we look at staggering statistics showing how the US finance sector is a net drag on their economy .

Also, as the British government initiates Brexit divorce negotiations to leave the EU, we discuss something they ought to know, but obviously don't – they're actually in a very weak position. Could it mean the beginning of the end of the finance curse gripping the UK economy?

Featuring: John Christensen and Alex Cobham of the Tax Justice Network, and Professor of Economics Gerald Epstein of the University of Masachusetts Amhurst , author of Overcharged: The High Cost of High Finance . Produced and presented by Naomi Fowler for the Tax Justice Network.

Professor Gerald Epstein:

If you look at particular finance centres, say London and New York, the problem is that the net cost of this system is quite significant, it imposes a cost not only on people who use finance but for the whole economy. So, what we need to think about is what are the more productive activities that ought to be substituted for these excessive aspects of finance?

John Christensen, Tax Justice Network on Britain's weak position in Brexit negotiations:

We might be seeing the start of the end of Britain's grip by the Finance Curse

https://www.youtube.com/embed/E7oOiJl1n1I

Download the mp3 to listen offline anytime on your computer, mobile/cell phone or handheld device by right clicking here and selecting 'save link as'.

Want more Taxcasts? The full playlist is here .

Want to subscribe? Subscribe via email by contacting the Taxcast producer on naomi [at] taxjustice.net OR subscribe to the Taxcast RSS feed here OR subscribe to our youtube channel, Tax Justice TV OR find us on iTunes

skippy , March 25, 2017 at 3:01 am

Drag = Rentier = bottle neck economics which in the end becomes a death spiral due to lack of demand and jobs quality .

Si , March 25, 2017 at 3:45 am

It is a cleverly worked out system for wealth transfer. Complex laws, political backing and protection even if you break the law. At least in the old days when you got robbed you had the signal of having a pistol pointed at you. The modern version, with all the insider media psyops, leaves those who are preyed upon feeling that they are the ones to blame.

The business model is straight out of the Cosa Nostra playbook – except there is media, political and legal backing.

Genius.

Hayek's Heelbiter , March 25, 2017 at 6:14 am

As an Italian friend of mine (who rarely goes north of 14th Street) once remarked, "The difference between the Mafia and bankers is that the Mafia always leaves a few crumbs on the table."

Watt4Bob , March 25, 2017 at 11:00 am

"Wouldn't you rather give me my money, that you have in your pocket, rather than force me to take the pistol out of my pocket, and point it at you, and rob you, and become a criminal?"

As you can clearly see, the logic is flawless, we are all much better off acquiescing to the reasonable demands of the FIRE sector, the only alternative being an admission that we're in the clutches of a deeply organized criminal element.

susan the other , March 25, 2017 at 11:44 am

thanks for this Taxcast, very to the point.

Did I hear that right – the private finance sector will have cost us (in the US) 23Tr$ by 2020. And from 1990 to 2005 big finance cost us (already) 14Tr in fees, pay, fraud, misallocation and lost productivity. Yet we continue to deregulate even though all governments know how destructive deregulated finance is.

And we know that the US is the biggest and most secret tax haven of them all

The first part of Taxcast speculated that Brexit will actually free the UK from the stranglehold of big finance and the country will be able to move on to more productive economic activity. So let us hope the US comes to its senses – just as the EU has finally isolated the rot of UK finance, maybe the rest of the world will isolate us.

Regulation seems to be hand-in-glove with national sovereignty. Whereas globalized finance might have escaped national regulation bec. there was always a safe haven for banksters, now with a backlash of indignant people all over the world there will be re-regulation at national levels. Since there is no global authority that can do that yet. Anyway, now that economies are trashed, there is way too much hot money to find good investments. It has already become absurd.

Colonel Smithers , March 25, 2017 at 11:51 am

Thank you, Susan.

I would not be so hasty thinking that the EU(27) has finally isolated the rot of UK finance. Much of that finance was not UK, but using the UK. The EU(27) is no less corrupt than the UK and as susceptible to big finance's charms.

I worked as a lobbyist in Brussels (and Basel and DC) for years.

susan the other , March 25, 2017 at 12:31 pm

yes, the EU does seem to be hungry to grab up all that finance for itself I keep thinking about Schaeuble coming to NYC c2012 and holding an impromptu news conference wherein he said it was fine with him if some banks went down because "we are overbanked." But we do have to admit that "overbanked" is an understatement since there are no productive investments and it's just self-defeating. I mean, how long can this go on?

Watt4Bob , March 25, 2017 at 3:21 pm

I mean, how long can this go on?

I don't know, how much money do you have left?

Gman , March 25, 2017 at 6:25 pm

Great piece. Thank you.

I'm not sure I get the 'rules on financial services are different than other goods and services' line being peddled here though. Maybe in theory, but it's pretty much a moot point.

It pays to remember that prior to 2008, hot (sovereign state backed) money flowed unimpeded like water across all EU borders, regardless of regulation, in search of quick handsome and easy returns, and much of it from subsequently bailed out by the ECB backdoor major lenders in France and Germany lending recklessly to poorer EZ members.

The lasting results of this and its hasty, damaging retreat and the inequitable socialisation of the debt across the EZ are, of course, still being felt today.

One of the major causes of the financial crisis was lax global regulation period. So let's not kid ourselves that by removing the UK from the European Union equation it is suddenly going to render it a bastion of sound prudential banking practice, particularly given various members recent comments that they intend to do anything in their power to tempt a post Brexit UK's financial services at the earliest opportunity.

I do subscribe to the belief that the UK financial services sector has been and still is toxic to its economy and long-term future, and without a doubt this informed the Brexit vote, albeit in some cases on a subconscious level.

[Mar 26, 2017] Plant-Closing Threats, Union Organizing and the North American Free Trade Agreement

Notable quotes:
"... These overall percentages actually underestimate the extent employers use plant-closing threats, since they include industries and sectors of the economy where threats to shut down and move facilities are much less likely and carry less weight because the industry or product is less mobile. In mobile industries such as manufacturing, transportation and warehouse/distribution, the percentage of campaigns with plant-closing threats is 62 percent, compared to only 36 percent in relatively immobile industries such as construction, health care, education, retail and other services. Where employers can credibly threaten to shut down or move their operations in response to union activity, they do so in large numbers. ..."
economistsview.typepad.com

anne -> anne... March 24, 2017 at 05:22 AM

http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1018&context=cbpubs

March, 1997

We 'll Close! Plant Closings, Plant-Closing Threats, Union Organizing and the North American Free Trade Agreement
By Kate Bronfenbrenner

Abstract

This article is based on "Final Report: The Effects of Plant Closing or Threat of Plant Closing on the Right of Workers to Organize." The report was commissioned by the tri-national Labor Secretariat of the Commission for Labor Cooperation (the North American Free Trade Agreement labor commission) "on the effects of the sudden closing of the plant on the principle of freedom of association and the right of workers to organize in the three countries."

Plant-closing threats and actual plant closings are extremely pervasive and effective components of U.S. employer anti-union strategies. From 1993 to 1995, employers threatened to close the plant in 50 percent of all union certification elections and in 52 percent of all instances where the union withdrew from its organizing drive ("withdrawals"). In another 18 percent of the campaigns, the employer threatened to close the plant during the first-contract campaign after the election was won.

Nearly 12 percent of employers followed through on threats made during the organizing campaign and shut down all or part of the plant before the first contract was negotiated. Almost 4 percent of employers closed down the plant before a second contract was reached.

This 15 percent shutdown rate within two years of the certification election victory is triple the rate found by researchers who examined post-election plant-closing rates in the late 1980s, before the North American Free Trade Agreement (NAFTA) went into effect.

These overall percentages actually underestimate the extent employers use plant-closing threats, since they include industries and sectors of the economy where threats to shut down and move facilities are much less likely and carry less weight because the industry or product is less mobile. In mobile industries such as manufacturing, transportation and warehouse/distribution, the percentage of campaigns with plant-closing threats is 62 percent, compared to only 36 percent in relatively immobile industries such as construction, health care, education, retail and other services. Where employers can credibly threaten to shut down or move their operations in response to union activity, they do so in large numbers.

[Mar 25, 2017] stock, bond and commodities historical returns

Mar 25, 2017 | economistsview.typepad.com
im1dc :, March 25, 2017 at 10:40 AM
FYI

For those who may be interested in quality data at your fingertips for free

Some you know, some you may not

http://www.marketwatch.com/story/ben-carlson-my-12-favorite-and-free-websites-for-investing-information-and-tools-2017-03-24

"Ben Carlson: My 12 favorite (and free) websites for investing information and tools"

By Ben Carlson...Mar 25, 2017...9:39 a.m. ET

..."I get a lot of questions from readers asking what data sources or models I use. I've been building my own Excel models and formulas for a while and have access to a handful of professional subscription-based offerings. But you don't have to spend tens of thousands of dollars on historical data providers to access useful financial data in the internet age. There are plenty of useful free websites that have historical market data, back-testing tools, risk statistics and scenario analysis capabilities.

Here are some that I have found helpful over the years:

NYU's stock, bond and cash historical returns

NYU professor Aswath Damodaran uses this site to update the performance numbers for stocks (S&P 500 SPX, -0.08% ), bonds (10-year Treasuries) and cash (three-month T-bills) once a year. It shows the annual returns for these three asset classes going back to 1928. You can download an Excel file that contains historical interest rates, bond yields and dividend yields. I use these numbers frequently.

Portfolio Visualizer

This site has one of the best free asset allocation back-testing programs I've come across. There are probably 20-30 different asset classes and sub-asset classes you can back-test to the 1970s with historical returns, drawdowns, real (after-inflation) returns, and growth of your initial investment. This site enables you to perform Monte Carlo simulations on withdrawal strategies, correlation matrixes between different assets, risk factor analysis and back-test real world portfolios using actual mutual funds and ETFs. That this website is free is pretty remarkable.

Robert Shiller's online data

Shiller has one of the longest-running data sets I've seen. His famous CAPE spreadsheet has the monthly stock price, interest rate, earnings and dividend data from 1871. This site has his comprehensive real estate data on home prices from 100 years ago.

Twitter

People on social media love to complain about social media, but I find a ton of value in the information I receive from Twitter TWTR, +1.41% I'm constantly finding helpful research, graphs, data and analysis that I wouldn't be exposed to otherwise. Twitter is my go-to source for what's going on in the world of finance and the markets, along with under-the-radar research.

Fama-French

Ken French updates this site using much of the research he's done over the years with Eugene Fama. This one is a factor investing nerd's dream, although the site does take some time to figure out how to use efficiently (at least in my experience). French updates his data regularly with historical returns on factors such as small-cap stocks, value stocks, quality stocks and momentum stocks dating to the 1920s. This site has great data on sector and industry historical returns. All of the data are easily exportable to Excel.

Credit Suisse Global Investment Returns Yearbook

Researchers Elroy Dimson, Paul March and Mike Staunton update this report once a year with numbers on stocks, bonds and inflation going back to 1900 for a number of countries. It's worth going through the entire report at least once.

MSCI

MSCI provides the most comprehensive free source of historical market data on foreign stock markets. It has performance numbers dating to 1970 for different countries, regions and markets, both developed and emerging.

Abnormal Returns

The best curated content each and every day on investing, personal finance, research and anything else in the world of finance. If you miss anything worth reading, you can be sure it will be here.

Federal Reserve Economic Data (FRED)

Econ geeks love this site because the Federal Reserve has data on almost anything related to economics you can think of. There's also plenty of good market data on stocks, bonds and interest rates as well. And the site enables you to personalize the graphs and data sets.

Morningstar

I find that Morningstar MORN, -0.36% has the best data on mutual funds and ETFs for performance purposes. You can see annual returns going back 10 years, and monthly and quarterly returns going back five years. The company provides after-tax returns and fund behavior gaps, which I find really useful for seeing what investors are actually earning in these funds. You can find breakdowns of fund holdings, investment styles, geographic allocations and more.

Yahoo Finance

I like Yahoo YHOO, -0.43% Finance for daily historical data on stocks, interest rates and indexes. It has annual and quarterly performance numbers for mutual funds from inception, many of which give you decades of returns.

Portfolio Charts

This is another great asset allocation back-testing tool that enables you to see how a number of well-known portfolios have performed over the years. This site has the best visuals of any I've played around with. You can also stress-test a large number of asset classes and strategies.

And here are a few more I've used over the years:

[Mar 25, 2017] Is productivity metric as problematic as GDP?

Mar 24, 2017 | cepr.net

anne: March 24, 2017 at 05:21 AM

Marketplace Radio Has Not Heard About the Productivity Slowdown

Marketplace radio had a peculiar piece * asking what the world would have looked like if the North American Free Trade Agreement never had been signed. The piece is odd because it dismisses job concerns associated with NAFTA by telling readers that automation (i.e. productivity growth) has been far more important in costing jobs.

"As in, ATMs replacing bankers, robots displacing welders. Automation is a very old story that goes back 250 years, but it has really picked up in the last couple decades.

"'We economic developers have an old joke,' said Charles Hayes of the Research Triangle Regional Partnership in an interview with Marketplace in 2010. 'The manufacturing facility of the future will employ two people: one will be a man, and one will be a dog. And the man will be there to feed the dog. And the dog will be there to make sure the man doesn't touch the equipment.'

"Ouch. But it turns out technology replaced workers in the course of reporting this very story."

Actually, the Bureau of Labor Statistics tells us the opposite. Productivity growth did pick up from 1995 to 2005, rising back to its 1947 to 1973 Golden Age pace (a period of low unemployment and rapidly rising wages), but has slowed sharply in the last dozen years.

[Graph]

While more rapid productivity growth would allow for faster wage and overall economic growth, no one has a very clear path for raising the rate of productivity growth. It is strange that Marketplace thinks our problem is a too rapid pace of productivity growth.

The piece is right in saying that the jobs impact of NAFTA was relatively limited. Certainly trade with China displaced many more workers. NAFTA may nonetheless have had a negative impact on the wages of many manufacturing workers. It made the threat to move operations to Mexico far more credible and many employers took advantage of this opportunity ** to discourage workers from joining unions and to make wage concessions. It's surprising that the piece did not discuss this effect of NAFTA.

* https://www.marketplace.org/2017/03/23/economy/what-if-nafta-were-never-born

** http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1018&context=cbpubs

-- Dean Baker

anne said in reply to anne...

https://fred.stlouisfed.org/graph/?g=d6jh

November 1, 2014

Total Factor Productivity for United States, 1952-2014

(Percent Change)


https://fred.stlouisfed.org/graph/?g=d7LU

November 1, 2014

Total Factor Productivity for United States, 1952-2014

(Indexed to 1952)

pgl said in reply to anne... March 24, 2017 at 06:01 AM

Thanks for the data. It confirms what Dean wrote here:

"the Bureau of Labor Statistics tells us the opposite. Productivity growth did pick up from 1995 to 2005, rising back to its 1947 to 1973 Golden Age pace (a period of low unemployment and rapidly rising wages), but has slowed sharply in the last dozen years.

anne said in reply to pgl... March 24, 2017 at 06:10 AM

Looking internationally, I consider the evidence conclusive that productivity growth has slowed significantly since 2005 in countries that have had limited infrastructure development, regardless of the emphasis in those countries on information technology advance and application.

libezkova -> anne... March 25, 2017 at 09:33 AM

And what is productivity ?

== quote ==

The OECD defines it as "the ratio of a volume measure of output to a volume measure of input".] Volume measures of output are normally gross domestic product (GDP) or gross value added (GVA), expressed at constant prices i.e. adjusted for inflation.

== end of quote ==

If you use GDP the result is suspect for the reasons GDP is suspect. If not, then it is sector/industry based metric.

In this sense growth of GDP in 1990th is not only the result of technological changes (Internet, PCs, cell phones) but also looting of the xUSSR economies

And as looting slowed down after 2000 growth of productivity also allowed down.

libezkova -> libezkova... March 25, 2017 at 10:32 AM

Steve Keen pointed out that all production is driven by energy (mostly oil and electricity). And the energy comes ultimately from the sun.

Either it is turned into production via feeding workers, or by fueling machinery (by burning hydrocarbons or indirectly via electricity supply).

That means that growth of productivity is inversely correlated with the price of oil. As the period of cheap hydrocarbons ended (remember $.99 per gallon of gas in 90th) the period of rapid productivity growth ended as well.

One of the aspects od the idea of "secular stagnation" is that high oil prices hit neoliberal economies like a hammer and the period of high oil prices started to undermine neoliberal globalization by making shipping more expensive.

That also means that without continuation of low oil prices the next debt crisis (aka Minsky moment) is eminent for the USA economy.

BTW none of US shale companies is profitable. They are all up to the neck in debt, and their method of extracting oil includes generating a flow of junk bonds. If financing stops most of them will be bankrupt in one year period.

Obama clever game with Iran helped to produce "Obama recovery" due to the period of "normal" oil prices which started in mid 2015.

It probably can be extended for another year or two. What happens next is completely unknown territory. It is clear that the US shale is a card that was already played. It can't be played again as output probably can be substantially raised (say 2 Mbd/day) only with high or very high oil prices (as in above $70 or higher).

After "Obama recovery" (which depends on continuing low oil prices created by clever political maneuvering in Arab world -- Hail Mary pass that worked) we might well face the period of "elevated oil prices" and increased stagnation of the US economy with noticeably higher level of unemployment.

Much depends on Trump playing his trump card of "détente" with Russia which theoretically could extend this period (Russia has the same level of oil production as Saudis and more reserves), but there were to much sand thrown by neocons and DemoRats for this scenario to work. I thing Russia now is no longer interested in partnership with the USA on the basis of maintaining low oil prices -- like KSA today, and might cut output further to get higher oil prices which are vital for their economy. Of course Russia has strong neoliberal fifth column (including pro-western directors of oil companies and oligarchs who have their wealth transferred to Western banks) but even they are pissed off by the USA now.

DemoRats wiped up Anti-Russian hysteria to the level when even contact with Russian official can be a "career limiting move" in the USA.

This hysteria now has its own self-propagating dynamics and is difficult to stop. It might last for the same period of time as McCarthyism hysteria (roughly from 1947 to 1956).

"... "The principal problem for Democrats is that so many media figures and online charlatans are personally benefiting from feeding the base increasingly unhinged, fact-free conspiracies - just as right-wing media polemicists did after both Bill Clinton and Obama were elected - that there are now millions of partisan soldiers absolutely convinced of a Trump/Russia conspiracy for which, at least as of now, there is no evidence. ..."

It put the Democrats and Republicans in sync as two equally warmongering parties, but what good that would bring for the American people and the world is hard to fathom.

The USA lost the possibility of switching personal car fleet to more economical hybrid models by adopting some drastic measures and now is less prepared for a new period of high oil prices. People are still buying SUV which became the most popular type of personal transportation in the USA, and small tracks.

On the electricity front there are some problems too. The looting of Russia and the flow of cheap uranium stopped. Building of high voltage East -West line necessary for substantial wind and solar production is still on the drawing board.

[Mar 25, 2017] Like most integral metrics (and, especially, like GDP) productivity growth is very suspect. Its importance was artificially amplified under neoliberalism to the sacred cow status

Notable quotes:
"... The long term absence of convergence in productivity growth between developed and developing countries should be of considerable concern, but seems overlooked even in settings such as trade negotiations in which such concerns especially need to be addressed. ..."
"... You need to understand that like most "integral" metrics (and, especially, like GDP) productivity growth is very suspect. Its importance was artificially amplified under neoliberalism to the "sacred cow" status. ..."
"... While the strong earnings growth of US-based corporations might, at least partially, be real and not all accounting tricks, the question arise what part of those gains are coming from improvements in domestic productivity and what part from offshoring. ..."
"... Productivity growth is an important part of the system of neoliberal myths (along with "cult of GDP" ) and this mythology is directed at deceiving the public that it is indirectly benefitting from the neoliberal transformation of the society, while in reality we observe impoverishment of the majority of population. As in " The USA is the country with fastest productivity grown." Rejoice. ..."
Mar 25, 2017 | economistsview.typepad.com

anne -> anne... March 25, 2017 at 10:31 AM

The long term absence of convergence in productivity growth between developed and developing countries should be of considerable concern, but seems overlooked even in settings such as trade negotiations in which such concerns especially need to be addressed.

libezkova -> anne..., March 25, 2017 at 04:42 PM

Anne,

You need to understand that like most "integral" metrics (and, especially, like GDP) productivity growth is very suspect. Its importance was artificially amplified under neoliberalism to the "sacred cow" status.

Government bureaucrats also are afraid to tell the truth. Richard Benson , a well-known critic of government labor statistics, who wrote several insightful papers on the subject, noted "The BLS is mindful of how politically sensitive any reported job data is to the White House, so there is a strong bias for the government bureaucrats to publish a favorable jobs report."

One hidden fact is that it is offshoring that is the driver of corporate profits and it distorts "productivity" statistics.

While the strong earnings growth of US-based corporations might, at least partially, be real and not all accounting tricks, the question arise what part of those gains are coming from improvements in domestic productivity and what part from offshoring.

Rising stratification of the society also affects this metric (via the ratio of "have more" vs "have not")

Productivity growth is an important part of the system of neoliberal myths (along with "cult of GDP" ) and this mythology is directed at deceiving the public that it is indirectly benefitting from the neoliberal transformation of the society, while in reality we observe impoverishment of the majority of population. As in " The USA is the country with fastest productivity grown." Rejoice.

It is also simplifies the adoption of pro financial oligarchy policies masked with technocratic jargon -- policies that destroyed New Deal and hurt the majority of the population ("rising labor costs" is one such usage).

Adopting technocratic posture (economics like Boeing there by using certain controls you can change flight course) serves like anesthetic. Rephrasing Marx we can say "neoliberal economics is the opium for the people". And it is by design. which confirms the iron law of oligarchy in a very interesting, unexpected way.

That's why jargon use by priests of neo-classical economics is almost in-penetrable for an ordinary person. The well known neoliberal stooge Greenspan was a real master of it.

So the importance assigned to such measures as GDP and productivity is, to a certain extent, politically motivated.

For example, in the denominator we have all those hedge funds managers and other members of financial oligarchy bonuses, and top managers exorbitant remuneration within all kinds of firms (which definitely drives productivity growth down ;-)

In the numerator are military expenses and income of financial sector (and now another somewhat parasitic sector close to banking -- medical insurance industry).

Both are essentially money stolen from people and, to a certain extent, from "real" economy.

Of cause, not all money are wasted as military spending in addition to war for neoliberal empire expansion (and related loot) also employs a lot of people and fund fundamental research; the myth about innovation of Silicon Valley is partially a myth; in reality in many cases this is a direct transfer of technology from the military sector.

Among the examples are integrated circuits, laser, wireless, Internet, multiprocessing, etc; even some algorithmic languages :-).

So when you have such fuzzy numerator and denominator, the result is also fuzzy and all conclusions based on them might be not worth electrons with which they are depicted on our screens.

As I mentioned before, productivity should be somewhat inversely correlated with the oil price, as "amount of energy per worker" is what defines at the end worker's productivity (via the level of automation, mechanization of his work). That's were the USA strong (or week, if you wish) point is -- it has the largest consumption of energy per capita in the world. If we normalize productivity via per capita energy consumption we will get a more interesting picture.

[Mar 25, 2017] Is productivity metric as problemtic as GDP?

Notable quotes:
"... The OECD defines it as "the ratio of a volume measure of output to a volume measure of input".] Volume measures of output are normally gross domestic product (GDP) or gross value added (GVA), expressed at constant prices i.e. adjusted for inflation. ..."
"... If you use GDP the result is suspect for the reasons GDP is suspect. If not, then it is sector/industry based metric. ..."
"... In this sense growth of GDP in 1990th is not only the result of technological changes (Internet, PCs, cell phones) but also looting of the xUSSR economies ..."
"... And as looting slowed down after 2000 growth of productivity also allowed down. ..."
"... One of the aspects of the idea of "secular stagnation" is that high oil prices hit neoliberal economies like a hammer and the period of high oil prices started to undermine neoliberal globalization by making shipping more expensive. ..."
"... BTW none of US shale companies is profitable. They are all up to the neck in debt, and their method of extracting oil includes generating a flow of junk bonds. If financing stops most of them will be bankrupt in one year period. ..."
Mar 24, 2017 | cepr.net

anne: March 24, 2017 at 05:21 AM

Marketplace Radio Has Not Heard About the Productivity Slowdown

Marketplace radio had a peculiar piece * asking what the world would have looked like if the North American Free Trade Agreement never had been signed. The piece is odd because it dismisses job concerns associated with NAFTA by telling readers that automation (i.e. productivity growth) has been far more important in costing jobs.

"As in, ATMs replacing bankers, robots displacing welders. Automation is a very old story that goes back 250 years, but it has really picked up in the last couple decades.

"'We economic developers have an old joke,' said Charles Hayes of the Research Triangle Regional Partnership in an interview with Marketplace in 2010. 'The manufacturing facility of the future will employ two people: one will be a man, and one will be a dog. And the man will be there to feed the dog. And the dog will be there to make sure the man doesn't touch the equipment.'

"Ouch. But it turns out technology replaced workers in the course of reporting this very story."

Actually, the Bureau of Labor Statistics tells us the opposite. Productivity growth did pick up from 1995 to 2005, rising back to its 1947 to 1973 Golden Age pace (a period of low unemployment and rapidly rising wages), but has slowed sharply in the last dozen years.

[Graph]

While more rapid productivity growth would allow for faster wage and overall economic growth, no one has a very clear path for raising the rate of productivity growth. It is strange that Marketplace thinks our problem is a too rapid pace of productivity growth.

The piece is right in saying that the jobs impact of NAFTA was relatively limited. Certainly trade with China displaced many more workers. NAFTA may nonetheless have had a negative impact on the wages of many manufacturing workers. It made the threat to move operations to Mexico far more credible and many employers took advantage of this opportunity ** to discourage workers from joining unions and to make wage concessions. It's surprising that the piece did not discuss this effect of NAFTA.

* https://www.marketplace.org/2017/03/23/economy/what-if-nafta-were-never-born

** http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1018&context=cbpubs

-- Dean Baker

anne said in reply to anne...

https://fred.stlouisfed.org/graph/?g=d6jh

November 1, 2014

Total Factor Productivity for United States, 1952-2014

(Percent Change)


https://fred.stlouisfed.org/graph/?g=d7LU

November 1, 2014

Total Factor Productivity for United States, 1952-2014

(Indexed to 1952)

pgl said in reply to anne... March 24, 2017 at 06:01 AM

Thanks for the data. It confirms what Dean wrote here:

"the Bureau of Labor Statistics tells us the opposite. Productivity growth did pick up from 1995 to 2005, rising back to its 1947 to 1973 Golden Age pace (a period of low unemployment and rapidly rising wages), but has slowed sharply in the last dozen years.

anne said in reply to pgl... March 24, 2017 at 06:10 AM

Looking internationally, I consider the evidence conclusive that productivity growth has slowed significantly since 2005 in countries that have had limited infrastructure development, regardless of the emphasis in those countries on information technology advance and application.

libezkova -> anne... March 25, 2017 at 09:33 AM

And what is productivity ?

== quote ==

The OECD defines it as "the ratio of a volume measure of output to a volume measure of input".] Volume measures of output are normally gross domestic product (GDP) or gross value added (GVA), expressed at constant prices i.e. adjusted for inflation.

== end of quote ==

If you use GDP the result is suspect for the reasons GDP is suspect. If not, then it is sector/industry based metric.

In this sense growth of GDP in 1990th is not only the result of technological changes (Internet, PCs, cell phones) but also looting of the xUSSR economies

And as looting slowed down after 2000 growth of productivity also allowed down.

libezkova -> libezkova... March 25, 2017 at 10:32 AM

Steve Keen pointed out that all production is driven by energy (mostly oil and electricity). And the energy comes ultimately from the sun.

Either it is turned into production via feeding workers, or by fueling machinery (by burning hydrocarbons or indirectly via electricity supply).

That means that growth of productivity is inversely correlated with the price of oil. As the period of cheap hydrocarbons ended (remember $.99 per gallon of gas in 90th) the period of rapid productivity growth ended as well.

One of the aspects of the idea of "secular stagnation" is that high oil prices hit neoliberal economies like a hammer and the period of high oil prices started to undermine neoliberal globalization by making shipping more expensive.

That also means that without continuation of low oil prices the next debt crisis (aka Minsky moment) is eminent for the USA economy.

BTW none of US shale companies is profitable. They are all up to the neck in debt, and their method of extracting oil includes generating a flow of junk bonds. If financing stops most of them will be bankrupt in one year period.

Obama clever game with Iran helped to produce "Obama recovery" due to the period of "normal" oil prices which started in mid 2015.

It probably can be extended for another year or two. What happens next is completely unknown territory. It is clear that the US shale is a card that was already played. It can't be played again as output probably can be substantially raised (say 2 Mbd/day) only with high or very high oil prices (as in above $70 or higher).

After "Obama recovery" (which depends on continuing low oil prices created by clever political maneuvering in Arab world -- Hail Mary pass that worked) we might well face the period of "elevated oil prices" and increased stagnation of the US economy with noticeably higher level of unemployment.

Much depends on Trump playing his trump card of "détente" with Russia which theoretically could extend this period (Russia has the same level of oil production as Saudis and more reserves), but there were to much sand thrown by neocons and DemoRats for this scenario to work. I thing Russia now is no longer interested in partnership with the USA on the basis of maintaining low oil prices -- like KSA today, and might cut output further to get higher oil prices which are vital for their economy. Of course Russia has strong neoliberal fifth column (including pro-western directors of oil companies and oligarchs who have their wealth transferred to Western banks) but even they are pissed off by the USA now.

DemoRats wiped up Anti-Russian hysteria to the level when even contact with Russian official can be a "career limiting move" in the USA.

This hysteria now has its own self-propagating dynamics and is difficult to stop. It might last for the same period of time as McCarthyism hysteria (roughly from 1947 to 1956).

"... "The principal problem for Democrats is that so many media figures and online charlatans are personally benefiting from feeding the base increasingly unhinged, fact-free conspiracies - just as right-wing media polemicists did after both Bill Clinton and Obama were elected - that there are now millions of partisan soldiers absolutely convinced of a Trump/Russia conspiracy for which, at least as of now, there is no evidence. ..."

It put the Democrats and Republicans in sync as two equally warmongering parties, but what good that would bring for the American people and the world is hard to fathom.

The USA lost the possibility of switching personal car fleet to more economical hybrid models by adopting some drastic measures and now is less prepared for a new period of high oil prices. People are still buying SUV which became the most popular type of personal transportation in the USA, and small tracks.

On the electricity front there are some problems too. The looting of Russia and the flow of cheap uranium stopped. Building of high voltage East -West line necessary for substantial wind and solar production is still on the drawing board.

[Mar 25, 2017] Its Not Just Unfair: Inequality Is a Threat to Our Governance

Notable quotes:
"... As recognized since ancient times, the coexistence of very rich and very poor leads to two possibilities, neither a happy one. The rich can rule alone, disenfranchising or even enslaving the poor, or the poor can rise up and confiscate the wealth of the rich. The rich tend to see themselves as better than the poor, a proclivity that is enhanced and even socially sanctioned in modern meritocracies. The poor, with little prospect of economic improvement and no access to political power, "might turn to a demagogue who would overthrow the government - only to become a tyrant. Oligarchy or tyranny, economic inequality meant the end of the republic." ..."
"... Some constitutions were written to contain inequalities. In Rome, the patricians ruled, but could be overruled by plebeian tribunes whose role was to protect the poor. There are constitutions with lords and commoners in separate chambers, each with well-defined powers. Sitaraman calls these "class warfare constitutions," and argues that the founding fathers of the United States found another way, a republic of equals. The middle classes, who according to David Hume were obsessed neither with pleasure-seeking, as were the rich, nor with meeting basic necessities, as were the poor, and were thus amenable to reason, could be a firm basis for a republic run in the public interest. There is some sketchy evidence that income and wealth inequality was indeed low in the 18th century, but the crucial point is that early America was an agrarian society of cultivators with an open frontier. No one needed to be poor when land was available in the West. ..."
"... Jefferson was proud of his achievement in abolishing the entail and primogeniture in Virginia, writing the laws that "laid the ax to the root of Pseudoaristocracy." He called for progressive taxation and, like the other founders, feared that the inheritance of wealth would lead to the establishment of an aristocracy. ..."
"... Madison tried to calculate how long the frontier would last, and understood the threat to the Constitution that industrialization would bring; many of the founders thought of wage labor as little better than slavery and hoped that America could remain an agrarian society. ..."
"... In perhaps the most original part of his book, Sitaraman, an associate professor of law at Vanderbilt Law School, highlights the achievements of the Progressive movement, one of whose aims was taming inequality, and which successfully modified the Constitution. There were four constitutional amendments in seven years - the direct election of senators, the franchise for women, the prohibition of alcohol and the income tax. To which I would add another reform, the establishment of the Federal Reserve, which provided a mechanism for handling financial crises without the need for the government to be bailed out by rich bankers, as well as the reduction in the tariff, which favored ordinary people by bringing down the cost of manufactures. Politics can respond to inequality, and the Constitution is not set in stone. ..."
"... It's interesting that the language of inequality is the language of technocrats, however worthy. It's a way to talk about the politics without referring to Marxist or populist/labor traditions which often involve social movements. ..."
Mar 25, 2017 | economistsview.typepad.com
anne : March 25, 2017 at 11:26 AM
https://www.nytimes.com/2017/03/20/books/review/crisis-of-the-middle-class-constitution-ganesh-sitaraman-.html

March 20, 2017

It's Not Just Unfair: Inequality Is a Threat to Our Governance
By ANGUS DEATON

THE CRISIS OF THE MIDDLE-CLASS CONSTITUTION
Why Economic Inequality Threatens Our Republic
By Ganesh Sitaraman

President Obama labeled income inequality "the defining challenge of our time." But why exactly? And why "our time" especially? In part because we now know just how much goes to the very top of the income distribution, and beyond that, we know that recent economic growth, which has been anemic in any case, has accrued mostly to those who were already well-heeled, leaving stagnation or worse for many Americans. But why is this a problem?

Why am I hurt if Mark Zuckerberg develops Facebook, and gets rich on the proceeds? Some care about the unfairness of income inequality itself, some care about the loss of upward mobility and declining opportunities for our kids and some care about how people get rich - hard work and innovation are O.K., but theft, legal or otherwise, is not. Yet there is one threat of inequality that is widely feared, and that has been debated for thousands of years, which is that inequality can undermine governance. In his fine book, both history and call to arms, Ganesh Sitaraman argues that the contemporary explosion of inequality will destroy the American Constitution, which is and was premised on the existence of a large and thriving middle class. He has done us all a great service, taking an issue of overwhelming public importance, delving into its history, helping understand how our forebears handled it and building a platform to think about it today.

As recognized since ancient times, the coexistence of very rich and very poor leads to two possibilities, neither a happy one. The rich can rule alone, disenfranchising or even enslaving the poor, or the poor can rise up and confiscate the wealth of the rich. The rich tend to see themselves as better than the poor, a proclivity that is enhanced and even socially sanctioned in modern meritocracies. The poor, with little prospect of economic improvement and no access to political power, "might turn to a demagogue who would overthrow the government - only to become a tyrant. Oligarchy or tyranny, economic inequality meant the end of the republic."

Some constitutions were written to contain inequalities. In Rome, the patricians ruled, but could be overruled by plebeian tribunes whose role was to protect the poor. There are constitutions with lords and commoners in separate chambers, each with well-defined powers. Sitaraman calls these "class warfare constitutions," and argues that the founding fathers of the United States found another way, a republic of equals. The middle classes, who according to David Hume were obsessed neither with pleasure-seeking, as were the rich, nor with meeting basic necessities, as were the poor, and were thus amenable to reason, could be a firm basis for a republic run in the public interest. There is some sketchy evidence that income and wealth inequality was indeed low in the 18th century, but the crucial point is that early America was an agrarian society of cultivators with an open frontier. No one needed to be poor when land was available in the West.

The founders worried a good deal about people getting too rich. Jefferson was proud of his achievement in abolishing the entail and primogeniture in Virginia, writing the laws that "laid the ax to the root of Pseudoaristocracy." He called for progressive taxation and, like the other founders, feared that the inheritance of wealth would lead to the establishment of an aristocracy. (Contrast this with those today who simultaneously advocate both equality of opportunity and the abolition of estate taxes.) Madison tried to calculate how long the frontier would last, and understood the threat to the Constitution that industrialization would bring; many of the founders thought of wage labor as little better than slavery and hoped that America could remain an agrarian society.

Of course, the fears about industrialization were realized, and by the late 19th century, in the Gilded Age, income inequality had reached levels comparable to those we see today. In perhaps the most original part of his book, Sitaraman, an associate professor of law at Vanderbilt Law School, highlights the achievements of the Progressive movement, one of whose aims was taming inequality, and which successfully modified the Constitution. There were four constitutional amendments in seven years - the direct election of senators, the franchise for women, the prohibition of alcohol and the income tax. To which I would add another reform, the establishment of the Federal Reserve, which provided a mechanism for handling financial crises without the need for the government to be bailed out by rich bankers, as well as the reduction in the tariff, which favored ordinary people by bringing down the cost of manufactures. Politics can respond to inequality, and the Constitution is not set in stone.

What of today, when inequality is back in full force? ...

Angus Deaton, a professor emeritus at Princeton, was awarded the Nobel in economic science in 2015.

anne -> anne... , March 25, 2017 at 11:26 AM
https://www.brookings.edu/wp-content/uploads/2017/03/6_casedeaton.pdf

March 17, 2017

Mortality and morbidity in the 21st century
By Anne Case and Angus Deaton

Summary

We build on and extend the findings in Case and Deaton (2015 * ) on increases in mortality and morbidity among white non-Hispanic Americans in midlife since the turn of the century. Increases in all-cause mortality continued unabated to 2015, with additional increases in drug overdoses, suicides, and alcoholic-related liver mortality, particularly among those with a high-school degree or less. The decline in mortality from heart disease has slowed and, most recently, stopped, and this combined with the three other causes is responsible for the increase in all-cause mortality. Not only are educational differences in mortality among whites increasing, but mortality is rising for those without, and falling for those with, a college degree. This is true for non-Hispanic white men and women in all age groups from 25-29 through 60-64. Mortality rates among blacks and Hispanics continue to fall; in 1999, the mortality rate of white non-Hispanics aged 50-54 with only a high-school degree was 30 percent lower than the mortality rate of blacks in the same age group; by 2015, it was 30 percent higher. There are similar crossovers between white and black mortality in all age groups from 25-29 to 60-64.

Mortality rates in comparable rich countries have continued their pre-millennial fall at the rates that used to characterize the US. In contrast to the US, mortality rates in Europe are falling for those with low levels of educational attainment, and are doing so more rapidly than mortality rates for those with higher levels of education.

Many commentators have suggested that the poor mortality outcomes can be attributed to slowly growing, stagnant, and even declining incomes; we evaluate this possibility, but find that it cannot provide a comprehensive explanation. In particular, the income profiles for blacks and Hispanics, whose mortality has fallen, are no better than those for whites. Nor is there any evidence in the European data that mortality trends match income trends, in spite of sharply different patterns of median income across countries after the Great Recession.

We propose a preliminary but plausible story in which cumulative disadvantage over life, in the labor market, in marriage and child outcomes, and in health, is triggered by progressively worsening labor market opportunities at the time of entry for whites with low levels of education. This account, which fits much of the data, has the profoundly negative implication that policies, even ones that successfully improve earnings and jobs, or redistribute income, will take many years to reverse the mortality and morbidity increase, and that those in midlife now are likely to do much worse in old age than those currently older than 65. This is in contrast to an account in which resources affect health contemporaneously, so that those in midlife now can expect to do better in old age as they receive Social Security and Medicare. None of this implies that there are no policy levers to be pulled; preventing the over-prescription of opioids is an obvious target that would clearly be helpful.

* http://www.pnas.org/content/early/2015/10/29/1518393112

Peter K. -> anne... , March 25, 2017 at 01:18 PM
"Of course, the fears about industrialization were realized, and by the late 19th century, in the Gilded Age, income inequality had reached levels comparable to those we see today. In perhaps the most original part of his book, Sitaraman, an associate professor of law at Vanderbilt Law School, highlights the achievements of the Progressive movement, one of whose aims was taming inequality, and which successfully modified the Constitution. There were four constitutional amendments in seven years - the direct election of senators, the franchise for women, the prohibition of alcohol and the income tax. To which I would add another reform, the establishment of the Federal Reserve, which provided a mechanism for handling financial crises without the need for the government to be bailed out by rich bankers, as well as the reduction in the tariff, which favored ordinary people by bringing down the cost of manufactures. "

It's interesting that the language of inequality is the language of technocrats, however worthy. It's a way to talk about the politics without referring to Marxist or populist/labor traditions which often involve social movements.

[Mar 25, 2017] Its interesting that the language of inequality is the language of technocrats, however worthy. Its a way to talk about the politics without referring to Marxist or populist/labor traditions which often involve social movements

Mar 25, 2017 | economistsview.typepad.com
anne -> anne... , March 25, 2017 at 11:26 AM
https://www.brookings.edu/wp-content/uploads/2017/03/6_casedeaton.pdf

March 17, 2017

Mortality and morbidity in the 21st century
By Anne Case and Angus Deaton

Summary

We build on and extend the findings in Case and Deaton (2015 * ) on increases in mortality and morbidity among white non-Hispanic Americans in midlife since the turn of the century. Increases in all-cause mortality continued unabated to 2015, with additional increases in drug overdoses, suicides, and alcoholic-related liver mortality, particularly among those with a high-school degree or less. The decline in mortality from heart disease has slowed and, most recently, stopped, and this combined with the three other causes is responsible for the increase in all-cause mortality. Not only are educational differences in mortality among whites increasing, but mortality is rising for those without, and falling for those with, a college degree. This is true for non-Hispanic white men and women in all age groups from 25-29 through 60-64. Mortality rates among blacks and Hispanics continue to fall; in 1999, the mortality rate of white non-Hispanics aged 50-54 with only a high-school degree was 30 percent lower than the mortality rate of blacks in the same age group; by 2015, it was 30 percent higher. There are similar crossovers between white and black mortality in all age groups from 25-29 to 60-64.

Mortality rates in comparable rich countries have continued their pre-millennial fall at the rates that used to characterize the US. In contrast to the US, mortality rates in Europe are falling for those with low levels of educational attainment, and are doing so more rapidly than mortality rates for those with higher levels of education.

Many commentators have suggested that the poor mortality outcomes can be attributed to slowly growing, stagnant, and even declining incomes; we evaluate this possibility, but find that it cannot provide a comprehensive explanation. In particular, the income profiles for blacks and Hispanics, whose mortality has fallen, are no better than those for whites. Nor is there any evidence in the European data that mortality trends match income trends, in spite of sharply different patterns of median income across countries after the Great Recession.

We propose a preliminary but plausible story in which cumulative disadvantage over life, in the labor market, in marriage and child outcomes, and in health, is triggered by progressively worsening labor market opportunities at the time of entry for whites with low levels of education. This account, which fits much of the data, has the profoundly negative implication that policies, even ones that successfully improve earnings and jobs, or redistribute income, will take many years to reverse the mortality and morbidity increase, and that those in midlife now are likely to do much worse in old age than those currently older than 65. This is in contrast to an account in which resources affect health contemporaneously, so that those in midlife now can expect to do better in old age as they receive Social Security and Medicare. None of this implies that there are no policy levers to be pulled; preventing the over-prescription of opioids is an obvious target that would clearly be helpful.

* http://www.pnas.org/content/early/2015/10/29/1518393112

Peter K. -> anne... , March 25, 2017 at 01:18 PM
"Of course, the fears about industrialization were realized, and by the late 19th century, in the Gilded Age, income inequality had reached levels comparable to those we see today. In perhaps the most original part of his book, Sitaraman, an associate professor of law at Vanderbilt Law School, highlights the achievements of the Progressive movement, one of whose aims was taming inequality, and which successfully modified the Constitution. There were four constitutional amendments in seven years - the direct election of senators, the franchise for women, the prohibition of alcohol and the income tax. To which I would add another reform, the establishment of the Federal Reserve, which provided a mechanism for handling financial crises without the need for the government to be bailed out by rich bankers, as well as the reduction in the tariff, which favored ordinary people by bringing down the cost of manufactures. "

It's interesting that the language of inequality is the language of technocrats, however worthy. It's a way to talk about the politics without referring to Marxist or populist/labor traditions which often involve social movements.

[Mar 25, 2017] Theyre Like The Praetorian Guard - Whistleblower Confirms NSA Targeted Congress, The Supreme Court, Trump Zero Hedge

Notable quotes:
"... "They're taking in fundamentally the entire fiber network inside the United States and collecting all that data and storing it, in a program they call Stellar Wind," Binney said. ..."
"... "That's the domestic collection of data on US citizens, US citizens to other US citizens," he said. "Everything we're doing, phone calls, emails and then financial transactions, credit cards, things like that, all of it." ..."
"... "I mean, that's just East German," Tucker responded. ..."
"... Rather than help prevent terrorist attacks, Binney said collecting so much information actually makes stopping attacks more difficult. ..."
"... "This bulk acquisition is inhibiting their ability to detect terrorist threats in advance so they can't stop them so people get killed as a result," he said. ..."
"... "Which means, you know, they pick up the pieces and blood after the attack. That's what's been going on. I mean they've consistently failed. When Alexander said they'd stop 54 attacks and he was challenged to produce the evidence to prove that he failed on every count." ..."
"... Binney concludes ominously indicating the origin of the deep state... "They are like the praetorian guard, they determine what the emperor does and who the emperor is..." ..."
Mar 25, 2017 | www.zerohedge.com
Authored by Chris Menahan via InformationLiberation.com,

NSA whistleblower William Binney told Tucker Carlson on Friday that the NSA is spying on "all the members of the Supreme Court, the Joint Chiefs of Staff, Congress, both House and Senate, as well as the White House."

Binney, who served the NSA for 30 years before blowing the whistle on domestic spying in 2001, told Tucker he firmly believes that Trump was spied on.

"They're taking in fundamentally the entire fiber network inside the United States and collecting all that data and storing it, in a program they call Stellar Wind," Binney said.

"That's the domestic collection of data on US citizens, US citizens to other US citizens," he said. "Everything we're doing, phone calls, emails and then financial transactions, credit cards, things like that, all of it."

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

"Inside NSA there are a set of people who are -- and we got this from another NSA whistleblower who witnessed some of this -- they're inside there, they are targeting and looking at all the members of the Supreme Court, the Joint Chiefs of Staff, Congress, both House and Senate, as well as the White House," Binney said.

"And all this data is inside the NSA in a small group where they're looking at it. The idea is to see what people in power over you are going to -- what they think, what they think you should be doing or planning to do to you, your budget, or whatever so you can try to counteract before it actually happens," he said.

"I mean, that's just East German," Tucker responded.

Rather than help prevent terrorist attacks, Binney said collecting so much information actually makes stopping attacks more difficult.

"This bulk acquisition is inhibiting their ability to detect terrorist threats in advance so they can't stop them so people get killed as a result," he said.

"Which means, you know, they pick up the pieces and blood after the attack. That's what's been going on. I mean they've consistently failed. When Alexander said they'd stop 54 attacks and he was challenged to produce the evidence to prove that he failed on every count."

Binney concludes ominously indicating the origin of the deep state... "They are like the praetorian guard, they determine what the emperor does and who the emperor is..."

Who's going to stop them?

toady -> Bank_sters Mar 25, 2017 9:22 PM
I'm continually amazed that anyone thinks they are not being "wiretapped".

One more time;

Everyone, from the queen to the homeless guy on the corner, is being tracked, recorded, and data mined to the hilt.

I hope people start to REALLY understand this....

NAV GUS100CORRINA Mar 25, 2017 7:19 PM

Bringing history more up to date, this is Stalinism, i.e., fascism. As John T. Flynn states, "Fascism is Fabian socialism plus the inevitable dictator." Neo-fascism of course is Stalinism-blame Hitler.

So, is it fascism?

Yes, says Major Todd Pierce (retired) in an interview with Philip Weiss of Mondoweiss - who says NSA whistle blower Bill Binney has "got to be one of the smartest people in the world, I don't think that's an exaggeration. He was one of the smartest people at the NSA.

Says Weiss: "And he agrees with me fully. Because he's seen the NSA. We're a more sophisticated form of what I think has to be called fascism. The term fascism was applied to the way the communists and Stalin got on as well. You bring the term fascist to what it really means, and that ultimately is, ultramilitarism and authoritarianism combined with an expansionist foreign policy. And that's us-what you can see us becoming."

http://mondoweiss.net/2016/09/innocence-worldview-retired/#sthash.XjFDU6km.dpuf

Rubicon727 -> GUS100CORRINA •Mar 25, 2017 7:38 PM

The Roman Empire's death was far more complicated than "moral rot" and its "currency devaluation." Read some history books.

Chris Hedges makes the observation that ALL empires that are scourges of the earth, eventually turn inwards. As the empire begins its fatal decline, the terror they inflicted on outsiders, is then turned against its own citizens.

We now see that happening in America. Banks, corporations, intel/military, etc. are turning inward: destroying meaningful employment, humane health care, and pilfering billions of $s reserved for the 1%.

Just Another Vi... -> FriendlyAquaponics •Mar 25, 2017 8:05 PM

A video worth revisiting......

Reuters ..........

... Obama criticizes Donald Trump endlessly....over Trumps assertions that the election is rigged..,

telling the candidate to "stop whining and go try to make his case to get votes."

http://www.reuters.com/article/us-usa-election-idUSKCN12I27L

HRClinton -> JLee2027 •Mar 25, 2017 8:15 PM

Who does the NSA work for on the Org Chart?

That's right, the DOD. They can't go completely rogue, without the explicit or implicit approval of the Secretary of Defense and his Deputies.

It is rather phoney and hypocritical of any POTUS - including Pres. Thump - to moan about the NSA, without loping off heads at the DOD and NSA. By that, I include all the Deputies, who do the real work and know the real secrets.

It's time that Thump had a "Come to Jesus" meeting with all these guys. Else he's part of the problem, and no amount of sugar coating can stop a turd being a turd.

TheReplacement -> HRClinton •Mar 25, 2017 9:42 PM

In an honest world, sure.

In reality, no. Like Binney said, they don't have to do anything they don't like because NOBODY can prove they haven't complied with orders. There is nobody who can watch the watchers. They can blackmail anyone.

'Gosh, I have no idea how that child porn got on my computer.'

CIA or NSA knows exactly how it got there. They put it there.

[Mar 25, 2017] New Health Care Plan: Open Source Drugs, Immigrant Doctors, and a Public Option

Mar 25, 2017 | economistsview.typepad.com
anne : March 25, 2017 at 07:54 AM , 2017 at 07:54 AM
http://cepr.net/blogs/beat-the-press/new-health-care-plan-open-source-drugs-immigrant-doctors-and-a-public-option

March 25, 2017

New Health Care Plan: Open Source Drugs, Immigrant Doctors, and a Public Option

Now that the Republican health care plan has been sent to the dust bin of history, it's worth thinking about how Obamacare can be improved. While the Affordable Care Act was a huge step forward in extending insurance coverage, many of the complaints against the program are justified. The co-pays and deductibles can mean the plans are of little use to middle income people with relatively low bills.

This is a great time to put forward ideas for reducing these costs and making other changes in the health care system. Obviously this congress and president are not interested in reforms that help low and middle income families, but the rest of us can start pushing these ideas now, with the expectation that the politicians will eventually come around.

There are two obvious directions to go to get costs down for low and middle income families. One is to increase taxes on the wealthy. The other is to reduce the cost of health care. The latter is likely the more promising option, especially since we have such a vast amount of waste in our system. The three obvious routes are lower prices for prescription drugs and medical equipment, reducing the pay of doctors, and savings on administrative costs from having Medicare offer an insurance plan in the exchanges.

Taking these in turn, the largest single source of savings would be reducing what we pay for prescription drugs. We will spend over $440 billion this year for drugs that would likely sell for less than $80 billion in a free market without patent monopolies and other forms of protection. If we paid as much as people in other wealthy countries for our drugs, we would save close to $200 billion a year. We spend another $50 billion a year on medical equipment which would likely cost around $15 billion in a free market.

If the government negotiated prices for drugs and medical equipment its savings could easily exceed $100 billion a year (see "Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer" * ). It could use some of these savings to finance open-source research for new drugs and medical equipment.

We already fund a huge amount of research, so this is not some radical departure from current practice. The government spends more than $32 billion on research conducted by the National Institutes of Health. It also picks up 50 percent of the industry's research costs on orphan drugs through the Orphan Drug Tax Credit. Orphan drugs are a rapidly growing share of all drug approvals, as the industry increasingly takes advantage of this tax credit.

The big change would not be that the government was funding research, but rather the research results and patents would be in the public domain, rather than be used by Pfizer and other drug companies to get patent monopolies. As a result, the next great breakthrough drug will sell as a generic for a few hundred dollars rather than hundreds of thousands of dollars. And MRI scans would cost little more than X-rays.

The second big potential source of savings would come from reducing the protectionist barriers which largely exclude foreign-trained physicians. Under current law, a foreign doctor is prohibited from practicing in the United States unless they complete a U.S. residency program. This keeps hundreds of thousands of well-qualified from physicians from practicing in the United States. As a result, our doctors earn on average more than $250,000 a year, roughly twice the average pay in other wealthy countries. (There are similar protectionist restrictions which inflate the pay of dentists.)

If we removed this barrier and allowed qualified foreign doctors to practice in the United States, we would likely get their pay down to levels comparable to that of doctors in countries like Canada and Germany. This could save us close to $100 billion a year on our health care bill, at least half of which would be savings to the government.

There is a concern that we would attract more doctors from developing countries. We could easily offset this brain drain by paying these countries enough so that they can train two or three doctors for every one that comes to the United States, thereby ensuring they gain from this arrangement as well. It is worth noting that these countries receive zero compensation now for the doctors they pay to train, but who then practice in the United States.

The third big source of saving would be having Medicare offer an insurance plan in the exchanges. This would ensure both that everyone had at least one good option regardless of where they lived and also that the private insurers in the system would face real competition. In 2010, the Congressional Budget Office projected that a public option would save the government $23 billion a year by 2020 and $29 billion by 2023.

The total savings to the government from these three changes easily exceed $150 billion a year, in addition to large savings that individuals outside the exchanges would see in their health care expenses. This is far more than enough to make the deductibles zero for each of the roughly 10 million people now in the exchanges. That would make Obamacare considerably more attractive.

Of course if the plans in the exchanges became more generous more people would opt to take advantage of them and we would see people leaving employer-provided plans. That is a problem that we can deal with at the time it happens. (We would need to have a portion of workers' current payments for employer provided plans go to the government to cover the cost of additional enrollees in the exchanges.) But the way forward in improving Obamacare is to use the market to make our health care system more efficient and reduce the ridiculous rents that now go to the wealthy as a result of waste in the system.

* http://deanbaker.net/images/stories/documents/Rigged.pdf

-- Dean Baker

anne -> anne... , March 25, 2017 at 07:56 AM
http://deanbaker.net/images/stories/documents/Rigged.pdf

October, 2016

Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer
By Dean Baker

The Old Technology and Inequality Scam: The Story of Patents and Copyrights

One of the amazing lines often repeated by people in policy debates is that, as a result of technology, we are seeing income redistributed from people who work for a living to the people who own the technology. While the redistribution part of the story may be mostly true, the problem is that the technology does not determine who "owns" the technology. The people who write the laws determine who owns the technology.

Specifically, patents and copyrights give their holders monopolies on technology or creative work for their duration. If we are concerned that money is going from ordinary workers to people who hold patents and copyrights, then one policy we may want to consider is shortening and weakening these monopolies. But policy has gone sharply in the opposite direction over the last four decades, as a wide variety of measures have been put into law that make these protections longer and stronger. Thus, the redistribution from people who work to people who own the technology should not be surprising - that was the purpose of the policy.

If stronger rules on patents and copyrights produced economic dividends in the form of more innovation and more creative output, then this upward redistribution might be justified. But the evidence doesn't indicate there has been any noticeable growth dividend associated with this upward redistribution. In fact, stronger patent protection seems to be associated with slower growth.

Before directly considering the case, it is worth thinking for a minute about what the world might look like if we had alternative mechanisms to patents and copyrights, so that the items now subject to these monopolies could be sold in a free market just like paper cups and shovels.

The biggest impact would be in prescription drugs. The breakthrough drugs for cancer, hepatitis C, and other diseases, which now sell for tens or hundreds of thousands of dollars annually, would instead sell for a few hundred dollars. No one would have to struggle to get their insurer to pay for drugs or scrape together the money from friends and family. Almost every drug would be well within an affordable price range for a middle-class family, and covering the cost for poorer families could be easily managed by governments and aid agencies.

The same would be the case with various medical tests and treatments. Doctors would not have to struggle with a decision about whether to prescribe an expensive scan, which might be the best way to detect a cancerous growth or other health issue, or to rely on cheaper but less reliable technology. In the absence of patent protection even the most cutting edge scans would be reasonably priced.

Health care is not the only area that would be transformed by a free market in technology and creative work. Imagine that all the textbooks needed by college students could be downloaded at no cost over the web and printed out for the price of the paper. Suppose that a vast amount of new books, recorded music, and movies was freely available on the web.

People or companies who create and innovate deserve to be compensated, but there is little reason to believe that the current system of patent and copyright monopolies is the best way to support their work. It's not surprising that the people who benefit from the current system are reluctant to have the efficiency of patents and copyrights become a topic for public debate, but those who are serious about inequality have no choice. These forms of property claims have been important drivers of inequality in the last four decades.

The explicit assumption behind the steps over the last four decades to increase the strength and duration of patent and copyright protection is that the higher prices resulting from increased protection will be more than offset by an increased incentive for innovation and creative work. Patent and copyright protection should be understood as being like very large tariffs. These protections can often the raise the price of protected items by several multiples of the free market price, making them comparable to tariffs of several hundred or even several thousand percent. The resulting economic distortions are comparable to what they would be if we imposed tariffs of this magnitude.

The justification for granting these monopoly protections is that the increased innovation and creative work that is produced as a result of these incentives exceeds the economic costs from patent and copyright monopolies. However, there is remarkably little evidence to support this assumption. While the cost of patent and copyright protection in higher prices is apparent, even if not well-measured, there is little evidence of a substantial payoff in the form of a more rapid pace of innovation or more and better creative work....

geoff -> anne... , March 25, 2017 at 08:43 AM
Medicare for all is a great idea but still well out of political reach for a while. On the other hand, cheaper drugs is a goal even trumpers could support with the right sales pitch.

the pushers are unusually profitable:

https://www.statista.com/statistics/272720/top-global-biotech-and-pharmaceutical-companies-based-on-net-income/

and they make for a pretty scummy pond in the swamp:

https://www.opensecrets.org/lobby/indusclient.php?id=h04

hey, it could happen here:

https://www.law360.com/articles/903111/canada-prevails-in-383m-eli-lilly-case

Peter K. -> geoff ... , March 25, 2017 at 08:59 AM
Trump met with the heads of the drug companies and decided the solutions was more deregulation.
DeDude -> anne... , March 25, 2017 at 10:23 AM
I generally love most of what Dean Baker does. But his weaknesses are on display in this piece. Just enough insights to sound convincing, but not enough to be the real McCoy. Yes we pay our medical doctors a lot more than France. However, ours first come out of undergraduate training having paid over $200K for that, then add another $300K for medical school. So that is a cool $500K in debt that their French counterparts don't have to deal with. Next (and before they can se any patients are internships (3 years) where they are not paid enough to begin paying down the student debt, followed by another 2-5 years of specialty training again with a compensation that cover living but not paying down the debt. Finally after becoming specialists (and those who don't are not paid $250K per year), they can begin paying down that student debt which in the meantime has grown substantially (with its private market interest rates).

If you were to put all those foreigners with their free education in direct competition with the domestic crop there would be no US born doctors. But that would be the least of the problems. American medical schools are for the most part outstanding and even the least of those graduating are quite good. That cannot be said for many of the other places in the world where we get most of our foreign trained doctors. There is a very good reason we demand that foreigners go through a US residency program before they can practice medicine. Regardless of what their (real or fake) papers say about their education, they have to perform up to US standards to pass the US residency programs and be licensed – and that is a good thing.

anne : , March 25, 2017 at 08:10 AM
https://www.nytimes.com/2017/03/24/upshot/health-insurance-medicare-obamacare-american-health-care-act.html?ref=business

March 24, 2017

What Comes Next for Obamacare? The Case for Medicare for All
By ROBERT H. FRANK

Republicans are in a bind. They've been promising to repeal Obamacare for seven years, and having won control of the White House and Congress, they had to try to deliver. But while their bitter denunciations of the Affordable Care Act may have depressed its approval numbers, they didn't make replacing it any easier.

On the contrary, the repeal-and-replace bill designed by House Speaker Paul D. Ryan drew withering criticism from the left and the right. Liberals condemned its use of reductions in health coverage for the poor to pay for large tax cuts for the wealthy, while conservatives bemoaned its retention of many subsidies adopted under Obamacare.

In the end, the repeal effort's biggest hurdle may have been loss aversion, one of the most robust findings in behavioral science. As numerous studies have shown, the pain of losing something you already have is much greater than the pleasure of having gained it in the first place. And the nonpartisan Congressional Budget Office estimated that Mr. Ryan's American Health Care Act (A.H.C.A.) would have caused more than 14 million people to lose coverage in the first year alone, with total losses rising to 24 million over the next decade. Many Republicans in Congress were nervous about the political firestorm already provoked by the mere prospect of such losses.

Loss aversion actually threatened the repeal effort on two fronts: voters' fear of losing their coverage, and lawmakers' fear of losing their seats. Like the first fear, the second appeared well grounded. Republican voters wouldn't have been the only ones losing coverage, of course, but early studies suggested that losses would have been concentrated among people who voted for President Trump. The Congressional Budget Office estimated, for example, that the A.H.C.A. would have caused premiums to rise more than sevenfold in 2026 for 64-year-olds making $26,500.

Now that Republicans have withdrawn Mr. Ryan's bill from consideration, attention shifts to what comes next. In an earlier column, I suggested that Mr. Trump has the political leverage, which President Obama did not, to jettison the traditional Republican approach in favor of a form of the single-payer health care that most other countries use. According to Physicians for a National Health Program, an advocacy group, "Single-payer national health insurance, also known as 'Medicare for all,' is a system in which a single public or quasi-public agency organizes health care financing, but the delivery of care remains largely in private hands." Christopher Ruddy, a friend and adviser of the president, recently urged him to consider this option.

Many Republicans who want to diminish government's role in health care view the single-payer approach with disdain. But Mr. Trump often seems to take pleasure in being unpredictable, and since he will offend people no matter which way he turns, he may want to consider why liberals and conservatives in many other countries have embraced the single-payer approach.

Part of the appeal of Medicare for all is that single-payer systems reduce financial incentives that generate waste and abuse. Mr. Ryan insisted that by relegating health care to private insurers, competition would lead to lower prices and higher quality. Economic theory tells us that this is a reasonable expectation when certain conditions are met. A crucial one is that buyers must be able to compare the quality of offerings of different sellers. In practice, however, people have little knowledge of the treatment options for the various maladies they might suffer, and policy language describing insurance coverage is notoriously complex and technical. Consumers simply cannot make informed quality comparisons in this industry.

In contrast, they can easily compare the prices charged by competing insurance companies. This asymmetry induces companies to compete by highlighting the lower prices they're able to offer if they cut costs by degrading the quality of their offerings. For example, it's common for insurance companies to deny payment for procedures that their policies seem to cover. If policy holders complain loudly enough, they may eventually get reimbursed, but the money companies save by not paying others confers a decisive competitive advantage over rivals that don't employ this tactic. Such haggling is uncommon under single-payer systems like Medicare (though it is sometimes employed by private insurers that supplement Medicare).

Consider, too, the mutually offsetting expenditures on competitive advertising and other promotional efforts of private insurers, which can exceed 15 percent of total revenue. Single-payer plans like Medicare spend nothing on competitive advertising (although here, also, we see such expenditures by supplemental insurers).

According to the Kaiser Family Foundation, administrative costs in Medicare are only about 2 percent of total operating expenditures, less than one-sixth of the rate estimated for the private insurance industry. This difference does not mean that private insurers are evil. It's a simple consequence of a difference in the relevant economic incentives.

American health care outlays per capita in 2015 were more than twice the average of those in the 35 advanced countries that make up the Organization for Economic Cooperation and Development. Yet despite that spending difference, the system in the United States delivers significantly less favorable outcomes on measures like longevity and the incidence of chronic illness....

anne -> anne... , March 25, 2017 at 08:15 AM
http://www.oecd.org/health/health-systems/oecd-health-statistics-2014-frequently-requested-data.htm

November, 2016

Organisation for Economic Co-operation and Development Health Data

Total health care spending per person, 2015 *

United States ( 9451)
OCED average ( 3814)

France ( 4407)

Total health care spending as a share of GDP, 2015

United States ( 16.9)
OCED average ( 9.0)

France ( 11.0)

Pharmaceutical expenditure per person, 2014 *

United States ( 1112)
OECD average ( 538)

France ( 656)

Practising physicians per 1,000 population, 2014

United States ( 2.6)
OECD average ( 3.3)

France ( 3.3)

Practising nurses per 1,000 population, 2014

United States ( 11.2)
OECD average ( 8.9)

France ( 9.6)

Physician consultations per person, 2014

United States ( 4.0)
OECD average ( 6.8)

France ( 6.3)

Medical graduates per 100,000 population, 2014

United States ( 7.3)
OECD average ( 11.4)

France ( 10.0)

* Data are expressed in US dollars adjusted for purchasing power parities (PPPs), which provide a means of comparing spending between countries on a common base. PPPs are the rates of currency conversion that equalise the cost of a given "basket" of goods and services in different countries.

[Mar 25, 2017] The good news is they now own health care. They now own Obamacare saidTrump

Mar 25, 2017 | economistsview.typepad.com
Fred C. Dobbs : , March 25, 2017 at 07:35 AM
In a Call to The Times, Trump Blames Democrats for the
Failure of the Health Bill https://nyti.ms/2nNPHD9
NYT - MAGGIE HABERMAN - MARCH 24, 2017

WASHINGTON - Just moments after the Republican plan to repeal and replace the Affordable Care Act was declared dead, President Trump sought to paint the defeat of his first legislative effort as an early-term blip.

The House speaker, Paul D. Ryan, was preparing to tell the public that the health care bill was being withdrawn - a byproduct, Mr. Trump said, of Democratic partisanship. The president predicted that Democrats would return to him to make a deal in roughly a year.

"Look, we got no Democratic votes. We got none, zero," Mr. Trump said in a telephone interview he initiated with The New York Times.

"The good news is they now own health care. They now own Obamacare."

Mr. Trump insisted that the Affordable Care Act would collapse in the next year, which would then force Democrats to come to the bargaining table for a new bill.

"The best thing that can happen is that we let the Democrats, that we let Obamacare continue, they'll have increases from 50 to 100 percent," he said. "And when it explodes, they'll come to me to make a deal. And I'm open to that."

Although enrollment in the Affordable Care Act declined slightly in the past year, there is no sign that it is collapsing. Its expansion of Medicaid continues to grow.

In a later phone interview with The Times, the Senate minority leader, Chuck Schumer, ridiculed Mr. Trump's remarks about Democrats being at fault.

"Whenever the president gets in trouble, he points fingers of blame," Mr. Schumer said. "It's about time he stopped doing that and started to lead. The Republicans were totally committed to repeal from the get-go, never talked to us once. But now that they realize that repeal can't work, if they back off repeal, of course we'll work with them to make it even better."

Mr. Trump said that "when they come to make a deal," he would be open and receptive. He singled out the Tuesday Group moderates for praise, calling them "terrific," an implicit jab at the House Freedom Caucus, which his aides had expressed frustration with during negotiations. ...

Fred C. Dobbs -> Fred C. Dobbs... , March 25, 2017 at 08:02 AM
On health-care, as on so much else,
President Trump passes the buck, reports
https://www.theatlantic.com/politics/archive/2017/03/the-buck-doesnt-stop-here-anymore/520839/
The Atlantic - David A. Graham - March 24, 2017

Speaking in the Oval Office Friday afternoon, President Trump surveyed the wreckage of the Obamacare repeal effort and issued a crisp, definitive verdict: I didn't do it.

The president said he didn't blame Speaker Paul Ryan, though he had plenty of implied criticism for the speaker. "I like Speaker Ryan. He worked very hard," Trump said, but he added: "I'm not going to speak badly about anybody within the Republican Party. Certainly there's a big history. I really think Paul worked hard." He added ruefully that the GOP could have taken up tax-reform first, instead of Obamacare-the reverse of Ryan's desired sequence. "Now we're going to go for tax reform, which I've always liked," he said.

As for the House Freedom Caucus, the bloc of conservatives from which many of the apparent "no" votes on the Republican plan were to come, Trump said, "I'm not betrayed. They're friends of mine. I'm disappointed because we could've had it. So I'm disappointed. I'm a little surprised, I could tell you."

The greatest blame for the bill's failure fell on Democrats, Trump said.

"This really would've worked out better if we could've had Democrat support. Remember we had no Democrat support," Trump said. Later, he added, "But when you get no votes from the other side, meaning the Democrats, it's really a difficult situation."

He said Democrats should come up with their own bill. "I think the losers are Nancy Pelosi and Chuck Schumer, because they own Obamacare," he said, referring to the House and Senate Democratic leaders. "They 100 percent own it."

Trump was very clear about who was not to blame: himself. "I worked as a team player," the president of the United States said, demoting himself to bit-player status. He wanted to do tax reform first, after all, and it was still early. "I've been in office, what, 64 days? I've never said repeal and replace Obamacare within 64 days. I have a long time. I want to have a great health-care bill and plan and we will."

Strictly speaking, it is true that Trump didn't promise to repeal Obamacare on day 64 of his administration. What he told voters, over and over during the campaign, was that he'd do it immediately. On some occasions he or top allies even promised to do it on day 1. Now he and his allies are planning to drop the bill for the foreseeable future.

It is surely not wrong that there is lots of blame to go around. Congressional Republicans had years to devise a plan, and couldn't come up with one that would win a majority in the House, despite a 44-seat advantage. The House bill was an unpopular one, disliked by conservatives and moderates in that chamber; almost certainly dead on arrival in the Senate; and deeply unpopular with voters. Even before the vote was canceled, unnamed White House officials were telling reporters that the plan was to pin the blame on Ryan. ...

The Republicans fold and
withdraw their health-care bill https://www.theatlantic.com/politics/archive/2017/03/trump-republicans-failure-obamacare/520788/
The Atlantic - Russell Berman - March 24, 2017

... Defeat on the floor dealt Trump a major blow early in his presidency, but its implications were far more serious for the Republican Party as a whole. Handed unified control of the federal government for only the third time since World War II, the modern GOP was unable to overcome its internecine fights to enact a key part of its policy agenda. The president now wants to move on to a comprehensive overhaul of the tax code, but insiders on Capitol Hill have long believed that project will be an even heavier lift than health care.

As the prospect of a loss became more real on Friday, the frustrations of GOP lawmakers loyal to the leadership began to boil over. "I've been in this job eight years, and I'm wracking my brain to think of one thing our party has done that's been something positive, that's been something other than stopping something else from happening," Representative Tom Rooney of Florida said in an interview. "We need to start having victories as a party. And if we can't, then it's hard to justify why we should be back here."

Nothing has exemplified the party's governing challenge quite like health care. For years, Republican leaders resisted pressure from Democrats and rank-and-file lawmakers to coalesce around a detailed legislative alternative to Obamacare. That failure didn't prevent them from attaining power, but it forced them to start nearly from scratch after Trump's surprising victory in November. At Ryan's urging, the party had compiled a plan as part of the speaker's "A Better Way" campaign agenda. Translating that into legislation, however, proved a much stiffer challenge; committee leaders needed to navigate a razor's edge to satisfy conservatives demanding a full repeal of Obamacare and satisfy moderates who preferred to keep in place its more popular consumer protections and Medicaid expansion. They were further limited by the procedural rules of the Senate, which circumscribed how far Republicans could go while still avoiding a Democratic filibuster. ...

[Mar 25, 2017] In addition to the public option and age 55+ Medicare buy-in, one thing that might work is abollishing the mandate and penalty and replaciing them with automatic enrollment. Call it Youre employed, youre covered!

Mar 25, 2017 | economistsview.typepad.com
New Deal democrat -> Lee A. Arnold ...

One issue going forward is whether the Dems should offer their own plan. I think they should.

As a few others have pointed out, Trump is not wedded to the GOP establishment. If he thinks he can "WIN bigly!" by allying with Dems, he will do so. I happen to think that he is mainly against "Obamacare" because Obama humiliated him at the White House Correspondents' Dinner once upon a time, and he is nothing if not vengeful. He wants to obliterate Obama's legacy.

So Dems need to make a big stink any time Trump administrativley undercuts Obamacare provisions to try to make it fail. But also they should give him the chance to do something he can call Trumpcare that actually works.

Obamacare does have some major problems (the individual mandate is hated, and the penalty isn't big enough. More young people need to buy in. Some of the Exchanges and health care provider networks are too narrow.

In addition to the "public option" and age 55+ Medicare buy-in, one thing that might work is abollishing the mandate and penalty and replaciing them with automatic enrollment. Call it "You're employed, you're covered!"

Just like SS, Medicare, unemployment and disability deductions to paychecks, establish a Health Care automatic deductible. If your employer offers healthcare, the deductible is reduced by the amount of the premium, all the way to zero if applicable.
If your employer doesn't offer healthcare, if you are under age 40, you are automatically enrolled in the least expensive Bronze plan in your state. If you are 40 or older, you are automatically enrolled in the least expensive Silver plan in your state.

The deductible would also include a small contribution towards Medicaid. Then, if you are unemployed, you are automatically enrolled in Medicaid, but can continue with the silver or bronze plan as above if you choose.

Dems could turmpet such a plan to "Reform and Improve" Obamacare, and campaign on pushing for it if they get a Congressional majority. Call it Trumpcare and President Caligula might sign on.

Reply Saturday, March 25, 2017 at 07:35 AM Lee A. Arnold : , March 25, 2017 at 04:48 AM
"Medicare for all" may be the best battle cry. 65-70% of the U.S. people want a single-payer. Bernie Sanders has effectively destroyed the old Democratic Party and sits in a commanding position as spokesman, he gets 6 TV cameras with an hour's notice and he is probably the most popular politician in the U.S. The Democrats don't have to push it for now, they can wait for news to develop. This is all on the Republicans. Let the managerial disaster of Trump and the utter immorality of the "Freedom Caucus" sink in a little more, this story has "legs" as they say in show biz.
mulp -> Lee A. Arnold ... , -1
Name the Senators, representatives, and governors Bernie Bros have delivered?

Where are the Bernie Bros Newts, Cruz, Marcos, ...?

I'm in my 70th year. Conservatives attacked liberals in the 60s, my youth, as promising free lunches to gain power. But what they really hated was liberals convinced voters to tax all voters to pay for the things most voters wanted everyone to have, BASED ON SOUND ECONOMICS TO MAXIMIZE EFFICIENCY AND WELFARE.

Friedman led the effort to distort theory to eliminate the broad meaning of general welfare in economics. He did it by eliminating the hard connection between labor cost and gdp. He argued that labor costs and consumption can be cut to increase profits, and that contrary to theory, higher profits is more efficient.

Laffer applied operations theory to taxes, as if government was taxing to maximize profits.

Thus supply side theory of profit maximization. The result delivered was the imperative to cut taxes. To cut labor costs. Thus they argued that every economic measure improves if taxes and wages are cut.

Reaganomics would deliver more stuff at lower cost, higher profut, and that makes everyone better off, especially those in poverty. Friedman saw consumption as a bad thing. He wanted higher gdp, less consumption. In other words, he rewrote Adam Smith attack on mercantile economics into a justification of returning to mercantile economic policy.

So, who do Bernie Bros offer as the Milton Friedman and Laffer to create an intellectual foundation to refute Adam Smith, FDR, Keynes, Galbraith, are return to hunter gatherer economics? Who is the economist who can convince us that Marxist economic theory will work, as long as it's not captured by right wing capitalists like Fidel Castro, Chavez, Stalin, Lenin, the founders of Israel, ....

Bernie certainly must be influenced by the same economic theory that created Israel. It grew from the same Marxist roots in Germany that powered Stalin and Lenin. Bernie is a pre-WWII Zionist as best I can tell.

Why wouldn't Bernie deliver Israel governance to the US? How would he prevent the greedy from joining the Movement?

And Israel has the social welfare state system Bernie wants. Hundreds of thousands of men do not work so they can study supported by welfare. Universal health care. Women are very equal in status.

I grew up heating the Zionist Dream, theory, much like Bernie did, but from conservative Indiana. Seemed very idealist virtue becoming reality in the 50s and 60s. I have often used Israel as the example of a good universal health care system, of education, of welfare. Never heard Bernie say, "I want the US to be like Israel." Why not? Why Sweden?

[Mar 25, 2017] The President had come to regret going along with Ryan's idea of making health care his first legislative priority

Notable quotes:
"... The larger lesson here is that conservatism failed and social democracy won. ..."
"... After seven years of fulminating against the Affordable Care Act and promising to replace it with a more free-market-oriented alternative, the House Republicans-who are in the vanguard of the modern conservative movement-failed to come up with a workable and politically viable proposal. Obamacare survived, and that shouldn't be so surprising. When it comes to health-care policy, there is no workable or politically viable conservative alternative. ..."
"... in cutting federal support for Medicaid, they dismantle the element of Obamacare that has been the most successful at insuring more people at a reasonable cost. ..."
"... The evil Obama created Obamacare that was so conservative that conservatives can't find an alternative that benefits the majority of conservatives. ..."
"... Many Republicans who want to diminish government's role in health care view the single-payer approach with disdain. But Mr. Trump often seems to take pleasure in being unpredictable, and since he will offend people no matter which way he turns, he may want to consider why liberals and conservatives in many other countries have embraced the single-payer approach. ..."
Mar 25, 2017 | economistsview.typepad.com

Peter K. : March 25, 2017 at 10:24 AM

http://www.newyorker.com/news/john-cassidy/the-health-care-debacle-was-a-failure-of-conservatism

THE HEALTH-CARE DEBACLE WAS A FAILURE OF CONSERVATISM

By John Cassidy March 24, 2017

Let the recriminations begin! Actually, the health-care-failure finger-pointing got under way well before Friday, when Donald Trump and Paul Ryan cancelled a House vote on the American Health Care Act. A day earlier, aides to the President let it be known that he had come to regret going along with Ryan's idea of making health care his first legislative priority.

In the coming days and weeks, there will be more of this blame shifting, and, in truth, there is plenty of blame to go around. Ryan failed to unify the House Republican caucus. Trump's staff allowed him to endorse a bill that made a mockery of his campaign pledge to provide health insurance for everybody. And Trump himself blundered into a political fiasco, apparently believing he could win over recalcitrant Republican members of Congress simply by popping over to Capitol Hill.

But this is just politics. The larger lesson here is that conservatism failed and social democracy won.

After seven years of fulminating against the Affordable Care Act and promising to replace it with a more free-market-oriented alternative, the House Republicans-who are in the vanguard of the modern conservative movement-failed to come up with a workable and politically viable proposal. Obamacare survived, and that shouldn't be so surprising. When it comes to health-care policy, there is no workable or politically viable conservative alternative.

Of course, that isn't how conservative lawmakers, pundits, and policy wonks will spin this. They will argue that Trump and Ryan betrayed free-market principles: if only they had proposed the outright repeal of Obamacare, and put forward a bill that genuinely liberated the health-care industry from federal intervention, everything would have worked out well. That will be the story-and it is a fairy tale.

The fact is that the health-care industry, which makes up about a sixth of the American economy, isn't like the market for apples or iPhones. For a number of reasons (which economists understand pretty well), it is riven with problems. Serious illnesses can be enormously costly to treat; people don't know when they will get ill; the buyers of health insurance know more about their health than the sellers; and insurers have a strong incentive to avoid providing their product to the sick people who need it the most.

Since the days of Otto von Bismarck, most developed countries have dealt with these problems by setting up a system in which the state provides medical insurance directly, or else mandates and subsidizes the purchase of private insurance, setting strict rules for what sorts of policies can be sold. Obamacare amounts to a hybrid model. It supplements employer-provided insurance, the traditional American way of obtaining health care, with a heavily regulated (and subsidized) individual insurance market and an expanded Medicaid system.

It is far from perfect. But, in combining mandates with subsidies, regulation, and access to a state-administered system for the poverty-stricken and low-paid, it is intellectually coherent. (Many of the problems it has encountered arose because the mandate to purchase insurance hasn't been effectively enforced, and not enough young and healthy individuals have signed up.) Since it leaves in place the basic structure of private insurance and private provision, Obamacare is also conservative. As is well known, parts of it resemble a proposal that the Heritage Foundation put forward in 1992.

Today's conservatives act as if they can simply wish away some of the problems that Obamacare was created to deal with. The original version of the American Health Care Act left in place many of the A.C.A.'s regulations but cut back the subsidies and gutted its Medicaid expansion. Had it been enacted, it would have led to higher premiums, at least in the short term, and a huge drop in coverage-twenty-four million people over ten years, according to the Congressional Budget Office. As these implications of the G.O.P. proposal became known to the public, the plan's approval rating fell and fell. In the end, according to a Quinnipiac poll, only nineteen per cent of Americans supported it.

The Freedom Caucus, a group of right-wing conservatives in the House, wanted a bill that stripped away more regulations, which they claimed would enable insurers to offer cheaper and more flexible plans. On the eve of the vote, Ryan agreed to change a clause defining the "essential health benefits" that insurers are required to provide if they sell policies on the Obamacare exchanges-benefits including maternity and mental-health services. But this change would have created two insurmountable problems.

Once insurers were able to craft individual policies without adhering to any list of required benefits, buyers would self-select. Young, healthy people would choose cheap, crappy policies, and older, sicker people would choose more comprehensive policies. Insurers, knowing this, would raise the prices of the good policies. "Worthless policies would get really cheap, but comprehensive policies would get astronomically expensive," Mother Jones's Kevin Drum pointed out. "Virtually no one would be able to afford them."

The other problem was political. Americans need maternity coverage, mental-health benefits, prescription drugs, pediatric services, lab tests, and the other things included on the list of essential health benefits. When moderate Republicans in places like New York, New Jersey, and Pennsylvania heard that these services might be eliminated under the amended legislation, they abandoned it in significant numbers. It was their desertion that ultimately killed the bill.

O.K., you might say: The American Health Care Act was a disaster, but what about all the other Republican health-care proposals that are out there? Maybe one of them provides a workable alternative to Obamacare. Let's briefly look at a few of them.

When he was in Congress, Tom Price, the Secretary of Health and Human Services, who supported the A.H.C.A., put forward a bill of his own. But it was basically a less generous version of the bill that just died: in gutting Medicaid and strictly limiting federal funding for high-risk pools to insure sick people, it would surely lead to a big rise in the number of uninsured. Something similar applies to a bill put forward by Senator Orrin Hatch, who chairs the Senate Finance Committee.

There are a few other plans kicking around conservative think tanks, some of which, like Obamacare, tie the level of subsidies to income. But all of these plans have other serious problems. In eschewing purchasing mandates, they run into the issue of younger people being unlikely to sign up for coverage. In giving insurers more freedom to offer different plans and different pricing structures, they encourage self-selection and undermine the risk-pooling that is at the heart of successful insurance schemes. And in cutting federal support for Medicaid, they dismantle the element of Obamacare that has been the most successful at insuring more people at a reasonable cost.

Another Republican plan that may now attract some attention is the proposal put forward by Senators Bill Cassidy, of Louisiana, and Susan Collins, of Maine. But, far from dismantling Obamacare, the Cassidy-Collins plan would allow big, populous states like New York and California to keep the current system in place, including the Medicaid expansion and the surtaxes on high earners. Red states that don't like Obamacare would be able to take federal money and design their own systems to provide basic, catastrophic coverage plans to everybody.

Because it retains so much of Obamacare, this proposal seems unlikely to receive majority support inside the G.O.P. In the coming weeks, Republicans in the Senate and the House will be trying anew to come up with an alternative that they can unite around, portray as a big break from the A.C.A., and sell to the American public. The lesson of the past few weeks is that they are likely to fail. As a novice to the subject noted recently, health care is complicated. Too complicated for ad-hoc policymaking and simplistic conservative nostrums.

mulp -> Peter K.... , March 25, 2017 at 10:44 AM
The evil Obama created Obamacare that was so conservative that conservatives can't find an alternative that benefits the majority of conservatives.

A few conservatives have prided themselves on commuting suicide by not treating their cancer in principled opposition to Obamacare, but most simply bitch about the high premiums which requires they get huge Obamacare tax credits while still paying a lot out of pocket because they bought the high deductible policy that makes the patient have skin in the game.

They want patients to pay out off a savings account to have skin in the game without needing to actually "save" to fill the HSA and have low premiums for insurance you buy with cancer treatment only when you have cancer. After all, if you buy insurance without cancer coverage, you qualify to buy insurance with cancer treatment because you have continuously bought insurance for five years.

... ... ...

Peter K. : , March 25, 2017 at 10:32 AM
https://www.nytimes.com/2017/03/24/upshot/health-insurance-medicare-obamacare-american-health-care-act.html?partner=rss&emc=rss&_r=1

"...

Now that Republicans have withdrawn Mr. Ryan's bill from consideration, attention shifts to what comes next. In an earlier column, I suggested that Mr. Trump has the political leverage, which President Obama did not, to jettison the traditional Republican approach in favor of a form of the single-payer health care that most other countries use. According to Physicians for a National Health Program, an advocacy group, "Single-payer national health insurance, also known as 'Medicare for all,' is a system in which a single public or quasi-public agency organizes health care financing, but the delivery of care remains largely in private hands." Christopher Ruddy, a friend and adviser of the president, recently urged him to consider this option.

Many Republicans who want to diminish government's role in health care view the single-payer approach with disdain. But Mr. Trump often seems to take pleasure in being unpredictable, and since he will offend people no matter which way he turns, he may want to consider why liberals and conservatives in many other countries have embraced the single-payer approach.

..."


[Mar 25, 2017] The issue isn't about loyalty . The issue is about establishing reasonable and affordable healthcare for at least the majority of American citizens that have gross earnings under a hundred thousands annually

Mar 25, 2017 | economistsview.typepad.com
llisa2u2, March 25, 2017 at 08:30 AM
President Donald Trump said on Friday that he was disappointed that a conservative faction in the House of Representatives blocked his healthcare legislation and said "we learned a lot about loyalty" from the effort. OMG. Who's playing political games? Who is NOT focused on not draining anything, except draining the pockets of the "relatively poor" majority for the profits of a "relatively wealthy" majority?

The issue isn't about "loyalty". The issue is about establishing reasonable and affordable healthcare for at least the majority of American citizens that have gross earnings under $250,000 annually.

Peter K. , March 25, 2017 at 08:36 AM
Neoliberal DeLong is good on the Insane Clown Posse of the Republican Party.

http://www.bradford-delong.com/2017/03/should-read-it-was-always-just-dingbat-kabuki-all-the-way-down-joe-barton-_representative-r-tx_-asked-by.html#more

Should-Read: It was always just dingbat kabuki all the way down:

Joe Barton: Representative, R-TX: "[Asked by] reporters... why, after Republicans had held dozens of nearly-unanimous votes to repeal ObamaCare...

"... under President Obama, they were getting cold feet now that they control the levers of power. "Sometimes you're playing Fantasy Football and sometimes you're in the real world", [Rep. Joe Barton R-TX] admitted. "We knew the president, if we could get a repeat bill to his desk, it would almost certainly be vetoed. This time we knew if it got to the president's desk it would be signed.""

t has, as far as the Republican congressional caucus is concerned, always been dingbat kabuki--at least, ever since Gingrich's revolt against George H.W. Bush at the start of the 1990s, if not ever since the passage of the Reagan "none of us really understands what's going on with all these numbers" tax cut in 1981.

David Brooks: "Any large vision...

...was beyond the drafters of this legislation.... They were more concerned with what this internal faction.... In 24 hours of ugly machinations, the Trump administration was willing to rip out big elements of the bill and insert big new ones, without regard to substance or ramification. House members were rushed to commit to legislation even while major pieces of it were still in flux... when the Congressional Budget Office had no time to score it, when the effect on health outcomes of actual Americans was an absolute mystery....

This House Republican plan would increase suffering, morbidity and death among the middle class and poor in order to provide tax cuts to the rich. It would cut Medicaid benefits by $880 billion between now and 2026. It would boost the after-tax income for those making more than $1 million a year by 14 percent.... This bill takes the most vicious progressive stereotypes about conservatives and validates them.... This bill has just a 17 percent approval rating....

If we're going to have the rough edges of a populist revolt, you'd think that at least somebody would be interested in listening to the people. But with this bill the Republican leadership sets an all-time new land speed record for forgetting where you came from.... The Republicans can't run policy-making from the White House because they have a marketing guy in charge of the factory. But they can't run policy from Capitol Hill because it's visionless and internally divided.... The politics driving the substance, not the other way around. The new elite is worse than the old elite-and certainly more vapid.

Peter K. -> Peter K.... , March 25, 2017 at 08:37 AM
The irony is that the failure of the neoliberal centrism of Brooks and DeLong to deliver shared prosperity is churning up a populist revolt against the establishment.

[Mar 25, 2017] It's Not Just Unfair: Inequality Is a Threat to Our Governance

Mar 25, 2017 | economistsview.typepad.com
anne : March 25, 2017 at 11:26 AM

, March 25, 2017 at 11:26 AM
https://www.nytimes.com/2017/03/20/books/review/crisis-of-the-middle-class-constitution-ganesh-sitaraman-.html

March 20, 2017

It's Not Just Unfair: Inequality Is a Threat to Our Governance
By ANGUS DEATON

THE CRISIS OF THE MIDDLE-CLASS CONSTITUTION
Why Economic Inequality Threatens Our Republic
By Ganesh Sitaraman

President Obama labeled income inequality "the defining challenge of our time." But why exactly? And why "our time" especially? In part because we now know just how much goes to the very top of the income distribution, and beyond that, we know that recent economic growth, which has been anemic in any case, has accrued mostly to those who were already well-heeled, leaving stagnation or worse for many Americans. But why is this a problem?

Why am I hurt if Mark Zuckerberg develops Facebook, and gets rich on the proceeds? Some care about the unfairness of income inequality itself, some care about the loss of upward mobility and declining opportunities for our kids and some care about how people get rich - hard work and innovation are O.K., but theft, legal or otherwise, is not. Yet there is one threat of inequality that is widely feared, and that has been debated for thousands of years, which is that inequality can undermine governance. In his fine book, both history and call to arms, Ganesh Sitaraman argues that the contemporary explosion of inequality will destroy the American Constitution, which is and was premised on the existence of a large and thriving middle class. He has done us all a great service, taking an issue of overwhelming public importance, delving into its history, helping understand how our forebears handled it and building a platform to think about it today.

As recognized since ancient times, the coexistence of very rich and very poor leads to two possibilities, neither a happy one. The rich can rule alone, disenfranchising or even enslaving the poor, or the poor can rise up and confiscate the wealth of the rich. The rich tend to see themselves as better than the poor, a proclivity that is enhanced and even socially sanctioned in modern meritocracies. The poor, with little prospect of economic improvement and no access to political power, "might turn to a demagogue who would overthrow the government - only to become a tyrant. Oligarchy or tyranny, economic inequality meant the end of the republic."

Some constitutions were written to contain inequalities. In Rome, the patricians ruled, but could be overruled by plebeian tribunes whose role was to protect the poor. There are constitutions with lords and commoners in separate chambers, each with well-defined powers. Sitaraman calls these "class warfare constitutions," and argues that the founding fathers of the United States found another way, a republic of equals. The middle classes, who according to David Hume were obsessed neither with pleasure-seeking, as were the rich, nor with meeting basic necessities, as were the poor, and were thus amenable to reason, could be a firm basis for a republic run in the public interest. There is some sketchy evidence that income and wealth inequality was indeed low in the 18th century, but the crucial point is that early America was an agrarian society of cultivators with an open frontier. No one needed to be poor when land was available in the West.

The founders worried a good deal about people getting too rich. Jefferson was proud of his achievement in abolishing the entail and primogeniture in Virginia, writing the laws that "laid the ax to the root of Pseudoaristocracy." He called for progressive taxation and, like the other founders, feared that the inheritance of wealth would lead to the establishment of an aristocracy. (Contrast this with those today who simultaneously advocate both equality of opportunity and the abolition of estate taxes.) Madison tried to calculate how long the frontier would last, and understood the threat to the Constitution that industrialization would bring; many of the founders thought of wage labor as little better than slavery and hoped that America could remain an agrarian society.

Of course, the fears about industrialization were realized, and by the late 19th century, in the Gilded Age, income inequality had reached levels comparable to those we see today. In perhaps the most original part of his book, Sitaraman, an associate professor of law at Vanderbilt Law School, highlights the achievements of the Progressive movement, one of whose aims was taming inequality, and which successfully modified the Constitution. There were four constitutional amendments in seven years - the direct election of senators, the franchise for women, the prohibition of alcohol and the income tax. To which I would add another reform, the establishment of the Federal Reserve, which provided a mechanism for handling financial crises without the need for the government to be bailed out by rich bankers, as well as the reduction in the tariff, which favored ordinary people by bringing down the cost of manufactures. Politics can respond to inequality, and the Constitution is not set in stone.

What of today, when inequality is back in full force? ...


Angus Deaton, a professor emeritus at Princeton, was awarded the Nobel in economic science in 2015.

anne -> anne... , March 25, 2017 at 11:26 AM
https://www.brookings.edu/wp-content/uploads/2017/03/6_casedeaton.pdf

March 17, 2017

Mortality and morbidity in the 21st century
By Anne Case and Angus Deaton

Summary

We build on and extend the findings in Case and Deaton (2015 * ) on increases in mortality and morbidity among white non-Hispanic Americans in midlife since the turn of the century. Increases in all-cause mortality continued unabated to 2015, with additional increases in drug overdoses, suicides, and alcoholic-related liver mortality, particularly among those with a high-school degree or less. The decline in mortality from heart disease has slowed and, most recently, stopped, and this combined with the three other causes is responsible for the increase in all-cause mortality. Not only are educational differences in mortality among whites increasing, but mortality is rising for those without, and falling for those with, a college degree. This is true for non-Hispanic white men and women in all age groups from 25-29 through 60-64. Mortality rates among blacks and Hispanics continue to fall; in 1999, the mortality rate of white non-Hispanics aged 50-54 with only a high-school degree was 30 percent lower than the mortality rate of blacks in the same age group; by 2015, it was 30 percent higher. There are similar crossovers between white and black mortality in all age groups from 25-29 to 60-64.

Mortality rates in comparable rich countries have continued their pre-millennial fall at the rates that used to characterize the US. In contrast to the US, mortality rates in Europe are falling for those with low levels of educational attainment, and are doing so more rapidly than mortality rates for those with higher levels of education.

Many commentators have suggested that the poor mortality outcomes can be attributed to slowly growing, stagnant, and even declining incomes; we evaluate this possibility, but find that it cannot provide a comprehensive explanation. In particular, the income profiles for blacks and Hispanics, whose mortality has fallen, are no better than those for whites. Nor is there any evidence in the European data that mortality trends match income trends, in spite of sharply different patterns of median income across countries after the Great Recession.

We propose a preliminary but plausible story in which cumulative disadvantage over life, in the labor market, in marriage and child outcomes, and in health, is triggered by progressively worsening labor market opportunities at the time of entry for whites with low levels of education. This account, which fits much of the data, has the profoundly negative implication that policies, even ones that successfully improve earnings and jobs, or redistribute income, will take many years to reverse the mortality and morbidity increase, and that those in midlife now are likely to do much worse in old age than those currently older than 65. This is in contrast to an account in which resources affect health contemporaneously, so that those in midlife now can expect to do better in old age as they receive Social Security and Medicare. None of this implies that there are no policy levers to be pulled; preventing the over-prescription of opioids is an obvious target that would clearly be helpful.

* http://www.pnas.org/content/early/2015/10/29/1518393112

Peter K. -> anne... , March 25, 2017 at 01:18 PM
"Of course, the fears about industrialization were realized, and by the late 19th century, in the Gilded Age, income inequality had reached levels comparable to those we see today. In perhaps the most original part of his book, Sitaraman, an associate professor of law at Vanderbilt Law School, highlights the achievements of the Progressive movement, one of whose aims was taming inequality, and which successfully modified the Constitution. There were four constitutional amendments in seven years - the direct election of senators, the franchise for women, the prohibition of alcohol and the income tax. To which I would add another reform, the establishment of the Federal Reserve, which provided a mechanism for handling financial crises without the need for the government to be bailed out by rich bankers, as well as the reduction in the tariff, which favored ordinary people by bringing down the cost of manufactures. "

It's interesting that the language of inequality is the language of technocrats, however worthy.

It's a way to talk about the politics without referring to Marxist or populist/labor traditions which often involve social movements.

[Mar 25, 2017] Our constitutional dollar democracy with its gerrymandering, limitless congressional revolving doors, SCOTUS unanswerable to the electorate, and first past the post voting provides loads of punch lines, not the least of which is the de facto two party system itself. Two competitors is merely duopoly

Mar 25, 2017 | economistsview.typepad.com
RC AKA Darryl, Ron -> ilsm... , March 25, 2017 at 07:09 AM
There is more than one joke. Our constitutional dollar democracy with its gerrymandering, limitless congressional revolving doors, SCOTUS unanswerable to the electorate, and first past the post voting provides loads of punch lines, not the least of which is the de facto two party system itself. Two competitors is merely duopoly. It takes a minimum of three viable choices to have any returns from competition that are significant to the consumers' preferences. Two competitors merely play off each other in predictable and increasingly ossified patterns.
New Deal democrat -> RC AKA Darryl, Ron... , March 25, 2017 at 07:17 AM
One very big quibble: >>SCOTUS unanswerable to the electorate<<

As bad as the SCOTUS can be, it would be unimaginably worse if it were subject to elections.

The big problem is that the Founders did not imagine life expectancies into the 80s. Throughout the 19th Century, the median time on the bench was about 14 years, and about 1/3 of all Justices served less than 10 years -- they got sick or died. Now the median time on the bench is 25 years, which is totally unacceptable.

If SCOTUS terms were set at 18 years, with a new Justice appointed every 2 years, independence would be preserved without the imposition of the "dead hands." Emeritus Justices could continue to serve on the appellate courts, and provisions would have to be made for deaths or retirements during the 18 year terms, but you get the idea.

RC AKA Darryl, Ron -> New Deal democrat... , March 25, 2017 at 07:36 AM
I did not mean elections. One of my favorite planks of the 1912 Bull Moose Party was the right for popular petition and referendum to overturn an unpopular SCOTUS decision. Roe V. Wade could not be overturned by referendum (which some fear but votes are measured by heat count rather than audible volume). Citizen United would be overturned by referendum. I trust democracy more than most, but still I don't get silly about it.

OTOH, SCOTUS term limits are also a good idea.

RC AKA Darryl, Ron -> RC AKA Darryl, Ron... , March 25, 2017 at 07:38 AM
"...heat count..."

[No, HEAD count. If votes were measured by heat count then Bernie Sanders would be POTUS now.]

Paine -> New Deal democrat... , March 25, 2017 at 07:58 AM
New deal (D)emocrat

Is not a democrat

Or at least it would seem
NdD is no small d democrat

The court system we inherited is like many institutions
Ormed in our ante bellum era
an artifact of slave power

Paine -> Paine... , March 25, 2017 at 08:01 AM
Post bellum
The emerging big corporate power
found this arrangement congenial to its interests

The one challenge time ?


The new deal


The very era our sincere progressive liberal
NdD likes to impersonate at lawn parties

Paine -> Paine... , March 25, 2017 at 08:02 AM
The FED as drafted and redrafted
Is the supreme wanna be
mulp -> New Deal democrat... , March 25, 2017 at 08:18 AM
Yeah, Republicans should have appointed more of the judges.
New Deal democrat -> mulp... , March 25, 2017 at 09:56 AM
Democrats have held power for 10 of the last 18 years which would mean 5 of the current Justices would have been appointed by DSL.

[Insert snide remark about math abilities here.]

New Deal democrat -> New Deal democrat... , March 25, 2017 at 09:59 AM
Further, since 1968 (that's almost a half century ago, Dems have appointed exactly 5 Justices in total.

Under my system they would have appointed 10.

ilsm -> RC AKA Darryl, Ron... , March 25, 2017 at 09:06 AM
cnn resembles deep red tea party fox news.....

and the run of the mill dems should fit their tri-corn hats

RC AKA Darryl, Ron -> ilsm... , March 25, 2017 at 09:37 AM
I will take your word for it. We don't watch either CNN nor Fox News at my house. Mostly we watch local (same news and weather crew here appears on each the WWBT/WRLH local NBC/Fox affiliates) news with some sampling of MSNBC and Sunday morning ABC and CBS shows along with the daily half hour of NBC network following the evening local. Cable news is sort of an oxymoron given the prevailing editorial slants. The now retired local TV news anchor Gene Cox laid the groundwork for the best news team in central VA by setting a high bar at his station. Gene laid it all out southern fried with satirical humor and honesty unusual in TV news.
RC AKA Darryl, Ron -> RC AKA Darryl, Ron... , March 25, 2017 at 09:38 AM
Maybe more sarcasm than satire, but the point is the same - wit and honesty.
JohnH -> Chris G ... , March 25, 2017 at 07:52 AM
Apparently we have two jokes alternating to lead America: the Republican jokes vs. the Democratic jokes.

Democrats are a joke for rallying their elite around a candidate who had huge negatives and for t