Softpanorama

Home Switchboard Unix Administration Red Hat TCP/IP Networks Neoliberalism Toxic Managers
May the source be with you, but remember the KISS principle ;-)
Bigger doesn't imply better. Bigger often is a sign of obesity, of lost control, of overcomplexity, of cancerous cells

Neoliberalism

The ideology that dare not speak it's name is actually a New, More Dangerous, Form of Corporatism. This "religion of freedom" (redefinition of the meaning of the word "freedom" and sophisticated speculation on it is at the center of neoliberal religion) is a coercive cult enforced by corrupt, deceitful elite with the explicit goal of milking the adherents

Version 7.10

Skepticism and Pseudoscience > Who Rules America > Neoliberal Brainwashing

News An introduction to Neoliberalism Recommended books Recommended Links Neoliberalism war on 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
Neocon stooge formerly known as Anti-Globalist and Trump betrayal of his voters Is national security state in the USA gone rogue ? The problem of control of intelligence services in democratic societies 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
Media-Military-Industrial Complex Neocons New American Militarism Media domination strategy Libertarian Philosophy Frederick Von Hayek Neoliberal Deregulation
Neoliberal Brainwashing -- Journalism in the Service of the Powerful Few YouTube on neoliberalism History of neoliberalism PseudoScience Related Humor Politically Incorrect Humor 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]

Neoliberal ideology acted as a smokescreen that enabled the financially powerful to rewrite the rules and place themselves beyond the law.

Church , 10 Jun 2013 17:21


Introduction

The terms Neoliberalism and Casino Capitalism are used interchangeably. They define the same phenomenon. The term "Casino Capitalism" stresses that neoliberalism glorifies stock market, promotes "financialization" of the economy and creates powerful incentives for financial speculation and excessive risk-taking on the part of the public ("Greed is good"). By a masterstroke of introducing 401K large part of the US population became stock owners are mercilessly fleeced by bog and small financial intermediaries. Mass ownership of stock 401K plans created stable rent rest for financial intermediaries, which increase in size and importance in the economy approximately 100 times. Add to this introduction of "gambling style" financial instruments such as derivatives, "naked" commodity futures (settled in dollars, not in product), currency speculations, intentional blowing of bubbles and even talking public "no-profit" Main Street entrepreneurs (dot-com crisis on 2000). That's why neoliberalism is also "casino capitalism" as markets, especially stock market play in it outsize role.

Like feudalism neoliberalism stipulate existence of three main classes (under feudalism they were aristocracy, merchants and serfs). simplifying we can defined them as billionaires, millionaires and the rest:

  1. "Inner party" members (aka the "New Class" -- neoliberal Nomenklatura similar to Busheviks nomenklatura. Inner party consists of mostly consists of billionaires and bought by them politicians. To the New Class the law "protects but does not apply." They are above the law like aristocracy was under feudalism. Catholic church and Clintons family is a good example here (Clinton cash, Bill Clinton sexapades, Hillary email scandal, etc). Other notable examples include McCain (member of Keating Five), Lloyd Blankfein (financial crash of 2018), and convicted pedophile Jeffrey Epstein (of Lolita Express fame) are another examples here. Amorality and criminality of the US neoliberal elite became a political issue in 2016 campaign (Podesta personality and so called Pizzagate conspiracy theory - Wikipedia; an alternative coverage is at PizzaGate Explained - YouTube; also pedophile scandal in Catholic church, in Great Britain and Scandinavian countries )

    Te "Inner Party" is dominated by financial oligarchs but several new groups are added to the elite as well. Among them are intelligence agencies brass (with intelligence agencies becoming the real political force, the core of the Deep State) and Silicon Valley moguls who are still short of becoming billionaires, but who run important companies (with top firms became interconnected with surveillance apparatus of the state and Wall Street) and top managers of multinationals and MIC.

  2. The upper 10% who represent the class of people who benefit form neoliberal globalization and on whom neoliberalism rely for its support and defense. Along with top 1% they are the group which income increased since 1980th, although in much lesser scale then for financial oligarchy. They consist of top level professionals (so called "creative class" in neoliberal New Speak): lawyers, sportsmen, programmers, doctors, engineers, actors, successful entrepreneurs, "lesser" politicians, MSM personalities, top journalists, scientists, university professors, upper military brass, etc.

    They can be tentatively called the class of millionaires as their net worth often exceeds one million dollars (in 2019 dollars). They also can be considered the upper middle class. The them law apply but with exceptions and sentences are usually very lenient. Here are the data for 2016 How Many Millionaires Are There in America Decamillionaires -DQYDJ

    We estimate that there are 14,814,453 millionaires in the United States. Our estimate puts the millionaire net worth goal at the 88.24% wealth bracket in the US in 2016, or 11.76% of all households.

  3. The bottom 90% of population so called deplorables. The income and standard of living of this group decreased under neoliberalism. Social security net (especially job security) evaporated. There is a definitely a switch to temporary and contract jobs in this segment, which make their situation even worse. Unemployment is running high with U6 measure above 10% most of the time. In other words they are the main loser of neoliberal globalization. Too them the law applies, but does not protect...

The key social goal of neoliberalism is redistribution of wealth up at the expense of the working class and lower middle class (the bottom 90% of population). It is political project designed to curb the power of labor (see Neoliberalism war on labor). So stagnation of wages and deterioration of the standard of living is not an aberration, but a key feature of neoliberalism. Suppression of wages is done under the false flag of austerity. Important for neoliberals sectors such as MIC (especially intelligence community), law enforcement, financial firm brass bonuses, and tax cuts for rich are not affected by austerity, only worker wages and social programs are.

The key social goal of neoliberalism is redistribution of wealth up. So stagnation of wages and deterioration of the standard of living is not an aberration, but a key feature of neoliberalism.

A new secular religion

Neoliberalism positions itself as a secular religion (which in its core is hostile to Christianity, much like Bolshevism) with the compliance enforced by the state. Somewhat similar God-Building trend in Marxism. For example, the prominent member of Bolsheviks Party Lunacharsky "saw Marxism as having religious components, including its faith in the inevitable victory of socialism."; according to Trotsky(1923) in some of the southern republics around 15% percent of party members were believers in Islam. Developing this insight Erich Voegelin’s on his controversial Political Religions (1938, see discussion at Stalinist Ritual and Belief System- Reflections on ‘Political Religion’) suggested that ideologies can function as secular religions.

For example, both national socialism and Bolshevism were deficient in terms of empirical evidence and had to be accepted on faith. The same is true for neoliberalism. The difference is that most of those movements generated a sense of devotion and mass mobilization with the emphasis of personal sacrifice, reminiscent of religious zeal. This is not the case for neoliberalism which adopted "inverted totalitarism" model

Like Stalinists which protected their narrow interpretation of Marxism from any challenges by power of the repressive apparatus of the state, neoliberals are people who believe that “the market does not and cannot take care of itself,” and indeed neoliberalism is a form of statism — one in which power of the state insulates the unregulated markets (and financial oligarchy which those markets enrich) from democratic attempts to regulate them, as well as from economic nationalism, which threatens neoliberal globalization..

Neoliberals are people who believe that “the market does not and cannot take care of itself,” and indeed neoliberalism is a form of statism — one in which power of the state insulates the unregulated markets (and financial oligarchy which those markets enrich) from democratic attempts to regulate them, as well as from economic nationalism which threatens neoliberal globalization.

At the center of this civic religion is the redefinition of the word "freedom" as freedom from any kind of coercion (compare with FDR four freedoms). That sophistry resonated very well within Americans and British people and became a "universal opener" using which neoliberal elite opens the door for any harmful for population actions/legislation, including but not limited to the restoration of the power of financial oligarchy. All in the name of freedom ;-). Dirty, but a very effective trick.

Those guys are real masters of deception and elevated it into the art form. In a way neoliberalism can be called the "religion of freedom," a coercive cult enforced by corrupt, deceitful elite with the explicit goal of milking the adherents. Neoliberal ideology is offering a closed, coherent belief system explaining the whole world via unverifiable and unsubstantiated by scientific testing system of dogmas, beliefs and rituals. Deification of markets is just slightly less fantastic then the idea of Paradise. Obviously, neoclassical economics is far removed from what is ordinarily regarded as valid scientific procedure. It is, essentially, a pseudo theory, a flavor of Lysenkoism, if you wish.

As core dogmas of neoliberalism are indefensible from scientific point of view if stated openly, neoliberalism has always been surrounded by an aura of secrecy and "esoteric teaching" (for elite only) which reminds Scientology. Even the name is suppressed in neoliberal MSM (US neoliberal MSMs rarely, if at all, mention this term "neoliberalism"; In UK the only exception is probably Guardian). To protect deplorables from discovering the ugly truth, elaborate pseudo theoretical smoke screen including mathiness was created. Exactly like in Marx famous quote "Religion is the opium of the people." This is actually the first instance when ideology conceived as a secular religion uses perverted mathematics (mathiness, Number racket) to justifies itself (I think Ancient Egypt priests might be the only analogy). As such this is a blatantly dishonest ideology. Like Bolshevism in the past, it also plays dirty tricks with the language in best 1994 style, creating neoliberal NewSpeak: compare for example how "economic freedom" is defined by neoliberals ("freedom of entrepreneurs and financial speculators from coercion and regulation") and how it was defined by FDR ("freedom [of working people and lower middle class] from want"). Indoctrination into "neoliberal newspeak" is done at the Universities using for brainwashing neoclassical economy and "business courses." Much like Soviet students were brainwashed with Marxism-Leninism and Marxist political economy. In both cases you can't graduate without passing mark for those courses. Again like Marxism neoliberalism is hostile to Christianity; some postulates of neoliberalism are closer to Judaism (entrepreneurs and financiers as a higher caste of the society, the inner party), some to Satanism.

Like Bolshevism neoliberalism is striving to rewrite history in the favorable light, or, even better, create conditions that people do not know the history at all. Neoliberalism even more then Bolshevism in the past is profoundly hostile to history. Which is actually a feature of all new cults. But the method neoliberalism uses is suppressing of education and coverage in MSM -- which is methods that characterize it as "inverted totalitarism". How many Us citizens know who Sheldon Wolin was? probably one in hundred or less. But most know who this corrupt stooge of financial oligarchy, "Chicago boy" Milton Friedman was because he is a saint of the church of neoliberalism. Or who was this plagiarist of Nietzschean philosophy, a Russia emigrant Ann Rand was?

Neoliberalism redistributes wealth up, justifying it with another key neoliberal myth -- the so called "trickle down economics" voodoo: the idea is that if the State directly helps the rich by redistributing wealth up, enforcing "market discipline", opening markets were they never existed (healthcare, education), as well as privatizing state assets, the poor will be better off as a by-product. Or as John Kenneth Galbraith quipped: “Trickle-down theory - the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.” In other words, neoliberalism is welfare for the top 1% or 0.1% of entrepreneurs and parasitic financial oligarchy (which state protects), and, at the same time, the "free market" jungle for the rest ("socialism for rich").

It is both an ideological assault, but also an economic assault on the power of labor (and especially organized labor) a political project to squash labor wages. On intuitive level neoliberalism emerged as the result of thinking like “We gotta crush labor, how do we do it?” And they found that neoliberalism can be a legitimizing theory for such a squash. Which again makes it similar to Bolshevism, which despite noble slogans kept working class wages at a very low level (which was noted by Orwell in his Animal Farm parable, and famous John Kenneth Galbraith quote "Under capitalism, man exploits man. Under communism, it's just the opposite")

And, again, like Bolshevism, this is a self-reassuring, self-gratifying and self-explanatory high demand cult -- a pretty sophisticated and very deceptive ideological rosy glasses, which creates (and then enforces on lemmings) a distorted image of reality. Important part of "reproduction" mechanism if this ideology is that it is deliberately propagated by neoliberal MSM and in neoliberal universities And neoliberal MSM (which are the only game in town in many countries now) as neoliberalism eliminated other forms of press via monopolization mechanism. In the USA lion share of MSM is owned by just six corporations. Along with domination in MSM, neoliberalism creates sophisticated and effective system of indoctrination of population which rivals the same under Bolsheviks in the USSR.

At the same time the cult of greed and denial of tenets of Christian morality like in case of Bolshevism tend to produce monsters. In the absence of a moral filter, as Martha Stout observed in her book The Sociopath Next Door (2006) "Politicians are more likely than people in the general population to be sociopaths... That a small minority of human beings literally have no conscience was and is a bitter pill for our society to swallow -- but it does explain a great many things, shamelessly deceitful political behavior being one." Recent information about child abuse among the neoliberal elite suggests that the proportion of sociopaths among neoliberal politicians is much higher that it was under the New Deal Capitalism. Such neoliberal politicians as Madeleine Albright, Bill Clinton (sexcapades , connection to Jeffrey Epstein's Lolita Express, "Clinton Cash" Scandal), Hillary Clinton ("We came, we saw, he died"), Dick "Vice" Cheney, Donald Trump might well be malignant narcissists. Discovery of pedophilia rings that involve politicians in several Western countries (such as Britain, Vatican, Norway ) is just another manifestation of the same trend: Amorality and criminality of neoliberal elite. And this is not a bug, this is a feature of neoliberalism, connected with neoliberalism core value "personal gratification above everything else". There is no cure for the infiltration of malignant narcissists and outright sociopaths into high echelons of government until moral character is valued by the society and is once again assessed before key promotion decisions are made. Typical for narcissists megalomania, the idea that after the collapse of the USSR the USA can and should rule the globe was a decisive force in the USA foreign policy (which was at the core a neocon foreign policy) since 1990th and precipitates the current decline of the USA as the world power due to overextension typical for all empires.

The neoliberal state justifies its decisions, policies, and rules by deification of the markets and by perversion of the meaning of the term the "freedom". In this Hayek inspired sophistry the negative definition is used as in "freedom from coercion" and interpreted mainly in economic space ( as the freedom of unlimited enrichment of talented and/or ruthless entrepreneurs.) Compare with "Four Freedoms" definition used Roosevelt administration during the New Deal: "freedom from want" and "freedom from fear" are not included in neoliberal definition. Those freedoms are simply denied under neoliberalism for everybody, but the top 10% of population.

Neoliberalism might therefore be defined as the elevation of market-based principles to the level of state religion. Or more correctly the techniques of elevation of market principles to the level of state-endorsed norms and state-sponsored secular religion which displaces Christianity (aka neoliberal rationality). This theological dimension of neoliberalism is very important (some researchers called neoliberalism "perverted Buddhism" in institualized suffering of lower classes ) and like in Marxism, the economics (in the form of neoclassical economics) is used for indoctrination on university students into this ideology. Neoliberals (in a form of adherents to neoclassical economics) dominate economics departments of major universities and not by some chance -- this is result of deliberate policy (borrowed from Trotskyism) of acquiring and maintaining the political power ("Quite coup").

This secular religion in which "market" and "competition" are new deities ("market fundamentalism") is especially visible in university education, were alternative approaches were mercilessly crushed. It is not an exaggeration to say that the main goal of teaching of economics in universities is the indoctrination, and it has very little in common with teaching economic as a complex and contradictory science. Mathematics serves as powerful smoke screen for hiding the neoliberal ideological core (mathiness)

Like neofascism, neoliberalism radically transforms the "welfare state" which was created by the New Deal, prioritizing big corporations over common people. The idea of welfare that was the core of New Deal Capitalism is not completely abolished. But under neoliberalism only corporations are desirable welfare recipients and the bigger they are, the more handouts they suck up. But at the same time neoliberalism and neofascism are mortal enemies: neofascism is at its core a flavor of far right nationalism (cultural or ethnic), while neoliberalism is based on globalism. Only in imperial nations like the USA they can partially merge and intervene (Trump's national neoliberalism is one example).

In labor relations neoliberal pursue a staunch anti-union stance. Labor is atomized, unions suppressed and individuals put on the market "naked" on conditions dictated by employees. Which means squeezing goo paying job in favor of terms and contractors, outsourcing and other anti--labor measure designed to preserve falling profitability in the market condition characterized by falling consumer demand (due to lower standard of living for the majority of population). And this is done at any cost. Even at the cost of human life. That situation gave rise to the term "naked capitalism".

The idea of welfare is not abolished. But under neoliberalism only corporations are desirable welfare recipients and the bigger they are, the more handouts they suck up.

Neoliberalism sees competition as the defining characteristic of human relations. That gave a rise of various (often stupid) "performance metrics" and cult of "performance reviews". It redefines citizens as consumers, who exercise they political power mainly buying and selling, the process which supposedly rewards merit (producing market winners) and punishes inefficiency. It postulates a primitive (and wrong) dogma that “the market” always delivers benefits that are superior and could never be achieved by planning. Which is definitely untrue for military contractors. In a way the "market" under neoliberalism is a kind of "all powerful deity". Which makes neoliberalism a variation of a secular religion (compare with "God building" faction of Bolsheviks Party which included such prominent figures as Lynacharsky). As such neoliberalism, like Marxism before, is hostile to Christianity. And while Marxism absolutize the power of human compassion and redefines paradise as a social system that supposedly can be built on Earth (communism), neoliberalism denigrates the power of human compassion and enforces "greed is good" and "homo homini lupus est" morale. Which turns into law of jungle for lower and middle class. In this sense it is more like a branch of Satanism, with greed as a virtue ("Greed is good"), speculation as a noble activity (while according to Chris Hedges "Speculation in the 17th century was a crime. Speculators were hanged." ) and the slogan "Homo homini lupus est" as one of the key Commandments. See Neoliberalism and Christianity

Neoliberalism sees competition as the defining characteristic of human relations, and greed as a virtue

This social system can be viewed as dialectical denial of socialism and represents the other extreme in classic triad "Thesis, antithesis, synthesis". We do not know yet what the synthesis will be like, but neoliberalism as a social system after 2008 shows definite cracks. Much like the USSR after the WWII when people serving in Red Army discovered what the standard of living in Central and Eastern Europe for workers was far superior that existed in the USSR and start to understand that "state socialism" as practiced in the USSR can't deliver promised higher standard of living for ordinary citizens and that Soviet "nomenklatura" is not that different from the capitalist class in appropriation in Marx terms of "surplus value of labor".

Inverted Totalitarism

Recent spy scandals demonstrated that neoliberal elite (like financial oligarchy in general) is aware of the loss of power of neoliberal ideology and is afraid of losing power. They no longer fully believe in the power brainwashing of population (at least after 2008). Neoliberal ideology started losing its grip on the population, much like Marxism in the USSR in1960th.

So they switched to coercion innovating in this area too: by introducing so called "inverted totalitarism" template of social coercion. This term was instoruced by Professor Shedon Wolin in his famous book ( see kettering.org which provides an introduction tot he book for free).

This template updates Bolsheviks-style repressive mechanisms by relying more the power of intelligence agencies as an enforcement squad of neoliberal agenda and the power of MSM for brainwashing of the population. Dissidents are no longer jailed or killed; they allow them to linger in obscurity carefully "cutting the oxygen" -- and access to media for popularization of their ideas and money for a decent standard of living. You can be a dissident under neoliberalism but prepare to end your life in poverty. So the explicit censorship by the state used under Bolshevism isrepaced by a more several private censorship of MSM controlled by neoliberal oligarchs, who provided to be as good in this area if not better as Bolsheviks (six corporations in the USA control all major MSM).

This development reveals another (and pretty alarming) commonality with Bolshevism -- historically Cheka (OGPU/NKVD/KGB) played prominent, if not decisive, role in defending and ensuring the survival of Bolsheviks' regime. It was betrayal of KCB brass that doomed the USSR in late 1991 -- starting from Andropov they switched sides and started to propagate the conversion of the country to neoliberalism. This negative trend is amplified by appointment, "not so bright", deeply conformist "ladder climbers" as the heads of intelligence agencies. For example, Brennan and Clapper represent the same category of people as a typical Soviet bureaucrat -- a ruthless (and most often corrupt and amoral) careerist with limited intellectual capacities, but devoted to the defense of the ruling oligarchy. Such people understand very well from which side his bread is buttered. Neoliberalism operates differently and does not require, or support mobilization of population. That's why it is viewed by some political scientists as a new mutation of corporatism called "inverted totalitarism" (the term introduced by Sheldon Wolin in his magnificent book and further developed by Wendy Brown in her essay Neoliberalism and the end of liberal democracy and the book Undoing the Demos- Neoliberalism's Stealth Revolution (2017). Internet as a distributed and democratic system supports mobilization of population. It also makes more difficult to control information flow and free flow of information and existence of critical to neoliberalism websites which summarize and presents in readable form the available information is a threat to neoliberalism. Which, being a secular religion, flourished on ignorance and brainwashing. That's why there is systematic propaganda campaign to associate critics of neoliberalism with Russians (which were chosen as a very convenient scapegoat due to Cold War past). That's why neo-McCarthyism witch hunt was launched after Trump elections with such fierce force.

Like Bolsheviks neoliberals are statists par excellence, using state to enforce and support the neoliberal dogma. In other words, neoliberals believe that "the market does not and cannot take care of itself" In this sense we can view neoliberalism is a form of state enforced regulation -- one that insulates the markets from challenges of democratic forces (with the ideological smoke screen of neoclassical economy, which is pure sophistry) as well as from economic nationalism. The recent Deep State attack on Trump is typical, classic neoliberal reaction on such a challenge from economic nationalism.

While hypocritically shouting "free market", "free market"... neoliberals like Bolsheviks in the past conspire to achieve power via iether by deceiving electorate with "carrots" in regular election mechanism (which after they came to power is neutered ) or by stealth coup d'état (or regime change via color revolution in weaker countries, especially LA(Chile, Brasil, Argentina) and post Soviet republics (Baltic republics, Ukraine, Moldova, Georgia) as well as infiltrating and subverting key institutions of the state via IMF and World Bank ("debt slavery") and, especially, intelligence agencies. CIA considered neoliberalism as a useful tool for thier "fight against communism" and was onboard with neoliberalism starting with Pinochet coup in Chile in 1973 done using fifth column of USA educated (read indoctrinated) "Chicago boys".

After coming to power neoliberals behave like Bolsheviks and openly and blatantly use government as an enforcer of their ideology. That includes bailing out financial oligarchy to prevent of meltdown of financial system during Minsky moments. Which are inevitable under neoliberalism as decimation of regulation (especially for financial sector) eliminated the negative feedback loop introduced by the New Deal, while financial institutions create a strong positive feedback loop in economics gradually sliding to more and more reckless behaviour as more time from the previous crisis elapses until the new financial crash hits them (and the socitry as whole) in the head ("stability is destabilizing" as quipped Minsky). At this point neoliberal state bails then our at the expense of ordinary taxpayers and traditional manufactures ("socialism for the financial oligarchy") who bare the main blunt of the crisis.

Trotskyism for the rich

Exaggerating threats to the USA sovereignty to cement the cracks in the neoliberal regime is also a page borrowed from the Stalinist period of the USSR. In the USSR people were accused being British spies. Now in the USA dissidents from neoliberal ideology (even such highly placed as Trump ;-) are, by definition, Russian intelligence service collaborators, or assets. This very useful for defenders of the neoliberal regime paranoia now extends even to contacts with the Ambassador of Russia by any US official which bring us to the set of behaviors at the peak of the USSR Great Terror. In a sense Mueller looks exactly like one of Stalin henchmen -- he tried to justify the view that is almost totally misguided, for the sake of defense of declining neoliberal ideology. Performing functions that are not that different from functions performed by the head of Gestapo or Stasi -- suppression of the political dissent to neoliberalism.

Like in the USSR for intelligence officials it is safer to flow with the neo-McCarthyism trend: the current atmosphere of paranoia makes it difficult for intelligence agencies to present the evidence that contradicts Russian spymania vision. The essence of which is identical to the vision of Stalinist Russia: that the USA is surrounded by two hostile powers (Russia and China) hell-bent on creating political crisis in the country and/or "regime change" and salivating to steal or dismantle the US global neoliberal empire. Which are engaged in stealing technological and military secrets.

Like Soviets, neoliberal policymakers are deeply troubled by the specter of the enemy at the gate, not realizing that the current social crisis in the USA is ultimately connected with the crisis of neoliberalism both as an ideology and the system of governance. Add to this faulty, ideologically distorted system of intelligence gathering and ruthless but intellectually second-rate careerists at the agencies (just look at Strzok, Brennan and Clapper). Like with the discovery of British spies in the USSR, the most obvious motive for Russiagate witch hunt is to cement cracks in neoliberal faced which appeared after 2008 by using for this purpose the external threat.

While many think about neoliberalism as "Ubercapitalism" or return to "Robber Barons" era on a new level, ideologically Neoliberalism is closer to Trotskyism ( and thus can be called Neo-Trotskyism ). It stresses the role of state as the enforcement power, the solidarity of neoliberal elite across the countries, with the dominant role of Anglo-Saxon elite. As well as the role of subversive methods and intelligence agencies in instituting the "regime change" (Trotskyite idea of permanent revolution mutated under neoliberalism into the idea of "permanent color revolution") . In the famous slogan "Proletarians of all countries, Unite!" neoliberalism substituted the word "proletarians" with the word "elites" (as in "Transnational elites, Unite!" ).

The slogan "All Power to [Workers] Councils" is replaced with "All power to financial oligarchy councils", and such clubs as Bilderberg Group, US Chamber of Commerce, Business Roundtable and similar organization are playing the role of hidden centers of power of the neoliberal regime.

Like Trotskyism neoliberalism in the ideology of "permanent expansion", ideology of neo-colonialism. The idea of "Permanent Revolution" was substituted with the idea of permanent "Color revolutions." Methods used remain a variation and enhancement of methods used by Trotskyites for destabilizing the government, with a special emphasis on use of the students, acquiring the control of mass media, implanting NGO (especially in the area various polls and "control over the legitimacy of elections". ) The latter is pretty nasty trick as people tend to believe the rumors that elections were hijacked. Stalin dictum: it does not matter how they vote, what matters is who is counting the votes is used here in a pretty innovative way. The neoliberal version sounds like: It does not matter how that vote, if elections are close all that matter is who is performing exit polls and cries louder about "irregularities" in the elections in the MSM.

Add to this various financial injection to "dissidents" via network of NGO and you get the picture. Caste of "professional revolutionaries" now consists of well-paid functionaries sitting in comfortable chairs in various, lavishly financed think tanks and NGO. In the USA they constitute the core of both parties which cares very little about the interest of rank-and-file members with "bait and switch" maneuver as the major tool for election success (Clinton, Bush, Obama, Trump). Marx is probably rolling in his grave.

Despite being a flavor of Trotskyism, Neoliberalism is still a very interesting, unique social system which by-and-large defeated and replaced both New Deal capitalism and various flavors of socialism (as well as facilitated the dissolution of the USSR by buying out Soviet nomenklatura, including KGB brass). It is the only social system in which the name of the system is somehow prohibited by MSM to mention. In this system, like under Stalin's version of socialism, the state play the leading role in enforcing the social system upon the people, brainwashing them with wall-to-wall 24 x 7 USSR-style propaganda an, if necessary, by state violence (As Sheldon Wolin mentioned neoliberalism tries to use violence selectively, as overuse of state violence undermines the social system, see Inverted Totalitarism).

Neoliberalism is the only social system in which the name of the system is prohibited (or at least suppressed) in MSM.

Like Bolshevism and national socialism neoliberalism lifted intelligence services into full fledged political player (which means that later stage of neoliberal state always evolves into the national security state). They also almost completely control the MSM , major commerce (Amazon), search (Google). and social sites (Facebook). For example, Google was created with the help of intelligence agencies at the initial state. Which means that the regime of total electronic surveillance, reminiscent of STASI is the "new normal" (see, Privacy is dead, get over it).

As we can see in color revolution launched by them against Trump (Trump is the proponent of a newer version of neoliberalism, which can be called "national neoliberalism" or "neocolonization instead of globalization") intelligence agencies now position themselves as "king makers" or Praetorian Guard that de-facto controls the election of the President of the USA. And the color revolution against Trump is not the isolated case when the USA intelligence agencies have gone rogue. It is just a step in natural evolution of neoliberalism and along with total surveillance is a "new normal".

Like Bolshevism and national socialism neoliberalism lifted intelligence services into full fledged political player,
no less important politically then judiciary, or legislative branch.

Instead of regulating predatory tendencies of capitalism like under New Deal, state under neoliberalism became just a corrupt policeman that serve interests of the large corporations and financial institutions (especially the latter) and, in most cases, at the expense of the standard of living of the common people. Standard of living of working class and lower middle class typically slides under neoliberalism (this fact is never accepted by neoliberals and hotly disputed).

Standard of living of working class and lower middle class typically slides under neoliberalism. In the USA this is the case since 1980th (this face is not accepted by neoliberals and hotly disputed). But this is a direct result of redistribution of wealth up, which is sine qua non of neoliberalism. Like Feudalism before neoliberalism promotes the notion of aristocracy masqueraded by the smoke screen on "creative class", but in essence consisting mainly of financial oligarchy, with substantial role of inheritance.

In this sense any neoliberal country is to a certain extent is an "occupied country", and the neoliberal regime is the occupying regime, much like Bolsheviks (with their theocratic state) were in USSR space. Or like the return on the new level to the Robber Barons era, when the state helped to squash West Virginia miner upraising in 1912-21 by military force.

Foreign policy under neoliberalism is marked by rampant militarism and constant wars for expanding of the global, USA-led neoliberal empire. Neocons dominate the USA foreign policy since early 70th (Chilean putsch and then Carter administration support of mujahedeen against Soviets).

Neoliberalism as an unstable social system with a strong built-in positive feedback loop;
the coming crisis and possible collapse of neoliberalism

Systems with a strong positive feedback loop are known to be unstable. So bailing out private institutions using public money (like happened in the US and Europe in 2008-2010) is not an aberration. but a quintessential feature of neoliberalism. And the crisis of 2008 which caused the regime of "secular stagnation" in Western societies will probably be repeated on a new level in 2020th (we can only guess about possible triggers; might the price of oil, or the size of derivatives market). Simplifying, we can call neoliberalism "Banks uber alles" regime.

The economic inefficiency of the USSR "state capitalism" model (one state -- one giant corporation) helped to undermine the validity and effectiveness of communist propaganda. And once the ideology is undermined, the elite can't restore the trust of population, which start viewing it with suspicion and contempt. The process of irreversible deterioration started and proceed rather slowly. After WWII Bolshevism survived for another 40 years or so, but eventually failed as the elite (aka Soviet nomenklatura) changed sides and joined neoliberal camp.

Like Bolshevism before it, neoliberalism proved to be unstable social system and the collapse of neoliberalism is not question of "if", but "when". A utopian system which is unable to deliver promised benefits to the common people, and which destabilizes capitalism in comparison with New Deal capitalism, producing periodic financial crisis with increasing severity. The first of such crisis was "savings and loans" crisis, followed by dot com bubble burst, and the financial crisis in 2008. The latter led to the Great Recession from which the USA never fully recovered.

In 2008 the large banks, which are the core of neoliberal economics, were saved from facing consequences of their "transgressions" only by massive state intervention. All powerful market was unable to save those sick puppies. The consequences of 2008 crisis did buried neoliberal ideology which from this point looks like cruel and primitive hypocrisy designed to restore the power of financial oligarchy to the level the latter enjoyed in 1930th. That did not mean that neoliberalism became completely toothless. It managed to stage comeback in several Latin American countries (the USA backyard). But in 2016 it led to the election of Trump who managed to defeat establishment candidate, neocon warmonger Hillary Clinton despite all the efforts of the neoliberal/neocon establishment to derail him. Trump pursues the version of neoliberalism which can be called "national neoliberalism" -- neoliberalism limited to the USA with implicit rejection of globalization (or at least large part of it). Which makes Trumpism somewhat similar to Stalinism. Unlike Trotsky, Stalin did not believe in the "World Revolution" mantra.

In the absence of alternatives neoliberalism managed somewhat recover after 2008 debacle, and even successfully counterattacked in some Latin American and European countries (Argentina, Brazil, Greece), but the Great Recession still left of huge and ugly scar on the neoliberal face. In any case glory days of triumphal march of neoliberalism all over globe are over. Crisis of neoliberalism also logically led to increase of share of "guard labor" in economics. On state level this resulted in hypertrophied growth of repressive apparatus including intelligence agencies. So when in 2016 neoliberalism in the USA experienced its first political crisis (when electorate rejected Hillary Clinton and elected Trump, creating the legitimacy crisis of the USA ruling neoliberal elite) the Deep State (the core of which consists of intelligence agencies and "Wall Street" ) launched a "color revolution" to depose him. Fake changes of falling under Russian control concocted by intelligence agencies in order to depose Trump which collectively are called "Russiagate" (which properly should be called Intelligence-gate) is the defining feature of this "color revolution".

With lower standard of living of the middle class is no longer possible to hide that "it 's not enough cookies for everybody" under neoliberal and the myth that rising tide lifts all boats"(Trickle-down economics ) is not applicable.

The economist John Kenneth Galbraith noted that "trickle-down economics" had been tried before in the United States in the 1890s under the name "horse and sparrow theory", writing:

Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: 'If you feed the horse enough oats, some will pass through to the road for the sparrows.'

Resentment of working class and lower middle class reached in 2016 unprecedented level, creating a real political crisis in the USA. Which was not unexpected. As Pope Francis aptly noted:

... Such an [neoliberal] economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.

Human beings are themselves considered consumer goods to be used and then discarded. We have created a “disposable” culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the “exploited” but the outcast, the “leftovers”.

Outsourcing and offshoring of manufacturing in the USA -- the citadel of neoliberalism led to epidemic of opiod abuse similar to epidemic of alcoholism among workers in the late USSR. Among the more than 72,000 drug overdose deaths estimated in 2017, the sharpest increase occurred among deaths related to fentanyl and fentanyl analogs (synthetic opioids) with nearly 30,000 overdose deaths ( Overdose Death Rates National Institute on Drug Abuse (NIDA) (

Impoverishment of lower 20% of the society (those who have so called McJobs) reached the level when we can talk about a third world country within the USA.

All those factors created pre-conditions for a sharp rise of far right nationalism. In a way neoliberalism naturally generated far right nationalism splash much like Gilded Age and the market crash of Sept 4, 1929 capitalism created precondition for the rise of national socialism. Reading NDSAP 25 points program (adopted in 1920) we can instantly feel that many problem that existed then are now replayed on the new level. After approximately 40 years of global dominance neoliberalism facade shows cracks. Backlash against neoliberal globalization became strong enough to provide upsets, albeit temporary, which demonstrated itself in Brexit, and election of Trump. Who, despite his election-time claims to be a fighter against neoliberal globalization, for restoration of local jobs, and against the wars for expanding neoliberal empire, he essentially folded in two-or three months after the inauguration.

Like Soviet version of Communism before it, Neoliberalism failed to meet its promises of rising standard of living (and the key idea of justifying of raising of inequality and redistribution of wealth up under neoliberalism was "rising water lifts all boats" mantra, or as Kenneth Galbraith famously defined it “Trickle-down theory - the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.” ). We can stress again, that the current opiod epidemics in the USA is not that different from epidemics of alcoholism in the USSR under Brezhnev's "well developed socialism" and has the same social roots.

It is important to understand that under neoliberalism the key priority is the maintenance of global neoliberal empire for the benefits of multinationals (with the associated idea of Global Neoliberal Revolution which, as we mentioned before, makes is similar to Trotskyism). Opening new markets is vital for the interests of transnational corporations and that means that the USA government supports the war for the expansion of the USA-led global neoliberal empire at the expense of interests of regular US citizens. Outsourcing and atomization of the US workforce (squeezing unions) means that neoliberal government has an adversarial attitude towards its common citizenry. They are, by definition, the second class citizens (Undermensch, or as Hillary Clinton elegantly coined it "basket of deplorables" ) . While neoliberal themselves ("creative class") are new Ubermench and like old aristocracy are above the law. So the idea of the "nomenklatura" as a ruling class in the USSR is now replayed on a new level. The fact the Ann Rand was a Soviet émigré tells you something ;-)

Like all other social systems neoliberalism evolved with time ( much like Bolshevism evolved from Leninism to Stalinism, then to Brezhnev's socialism and at last to Gorbachov "perestroika" ). Recently in the USA it morphed into "national neoliberalism" (neoliberalism that stresses the colonial model and direct economic and military pressure of vassals, instead of treaties based globalization model used in "classic" neoliberalism) which has uncanny similarities with "national socialism". This flavor was not well accepted by the current US neoliberal elite and attempts to stage the color revolution against Trump followed (Russiagate).

In various countries it can morph into quite different "regimes", despite the common "market fundamentalism" core. The simplest and pretty precise way to define is to view it 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! ...). It is "socialism for the upper strata of population and corporations, especially transnationals". It favors professionals (programmers, lawyers, doctors, university professors, etc), upper level managers and capital owners, so this social system acts inn the interests of top 10% of population, with the special emphasis on interests of top 1% or even 01%. For the rest of population it serves austerity as the only available dish.

In this sense neoliberals are as "internationalists" as communists were at their time, and may be even more (the term "globalism" is commonly used instead of "internationalism".) And like "Communist International", the "Neoliberal International" accepts the elite from any country, but only a very narrow strata of the elite and only on a certain conditions, with the leading role reserved for the USA elite and a part of G7 elite. Much like in Comintern the role of Moscow as a leader was something that can't be even discussed. Only taken for granted. Although spying capabilities of "Neoliberal International" via "five eyes" are tremendously more powerful then the rudimentary capabilities of Comintern. And the technology of staging "color revolutions" is more polished then Trotskyite approach to staging proletarian revolutions.

As a proverb say "One is a bad student, if he can't exceed the level of his teacher". Or "The mediocre teacher tells. The good teacher explains. The superior teacher demonstrates. The great teacher inspires" (William Arthur Ward). Neoliberals proved to be a very good students of Trotskyite method of subversion of elected governments, as many of them were actually former Trotskyites.

Neoliberals also have more money and that matters. This fact alone allows them to create a powerful "fifth column" in countries other then G7 who are on the receiving end of neoliberal expropriation of wealth to the top countries of Neoliberal International. Like in Comintern, "all pigs are created equal, but some pigs are more equal then others."

The key idea of obtaining power by training the cadre of "professional revolutionaries" introduced by social-democratic parties and, especially, Bolsheviks are replaced with no less effective the network of neoliberal think tanks. In other words neoliberalism borrowed and perverted almost all major ideas of social-democratic parties. Including the existence of a paid "party core" typical for Bolsheviks, and instrumental to the success of their coup d'état in October 1917 against Provisional government by Kerensky. Under neoliberalism this idea transformed into the network of think tanks that Koch and other billionaires have sponsored.

Monte Perelin society (the initial neoliberal think tank) explicitly tried to adapt successful idea of western social democratic parties and Bolsheviks to neoliberal doctrine. One such "appropriations" is the level of secrecy and existence of "underground" part of the party along with "legal" parliamentary faction, a set of figureheads who are controlled by "invisible hand" (honorable politician is the one who after he was bought stays bought). Some important theoretical work in this direction was done USA renegade Trotskyites (aka neoconservatives, especially by James Burnham as well as staunch neoliberals like James Buchanan (The Guardian)

The papers Nancy MacLean discovered show that Buchanan saw stealth as crucial. He told his collaborators that “conspiratorial secrecy is at all times essential”.

Instead of revealing their ultimate destination, they would proceed by incremental steps. For example, in seeking to destroy the social security system, they would claim to be saving it, arguing that it would fail without a series of radical “reforms”...

Gradually they would build a [well-paid] “counter-intelligentsia”, allied to a “vast network of political power” that would become the new establishment.

The control of MSM is another idea borrowed from Bolsheviks. Like Bolshevism, neoliberalism created it's own Neoliberal newspeak and a set of myths ("greed is good", "invisible hand", "the efficient markets hypothesis", "rational expectations scam", Shareholder value scam, supply side voodoo aka "rising tide lifts all boats", etc).

In "neoliberal newspeak" the term "freedom" is used as the excuse for ripping down public protections on behalf of the very rich. For example, "free market" means the market free from any coercion by the state (read "free from regulations") which makes it the corporate jungle where the most powerful corporation dictate the rules of the game and eat alive small fish with complete impunity. In no way neoliberal "free market" is fair. Actually neoliberals try to avoid to discuss the issue of farness of the market. This is anathema for them. As such neoliberalism has distinct Social Darwinism flavor and enforces scapegoating and victimization of poor and unemployed

In no way neoliberal "free market" is fair. Actually neoliberals try to avoid to discuss the issue of farness of the market. This is anathema for them. As such neoliberalism has distinct Social Darwinism flavor and enforces scapegoating and victimization of poor and unemployed

As neoliberalism inherited consumerism of the New Deal Capitalism, it adapted it for it own purposes. One distinct feature is trying to get into dent the majority of the population of the country as well as "lesser" countries (neo-colonialism)/

On the individual workers levels neoliberalism has sophisticated mechanisms of enforcing excessive debt on unsuspecting population with such mechanisms as credit card companies, mortgages, student debt, etc. And a worker with a large debt is, essentially, a debt-slave. Atomization (neoliberalism is openly and forcefully anti-union) and enslavement of the workforce is exactly what neoliberalism is about: recreation of the plantation economy on a new technological and social levels. Not that unions are without problems in their own right, but crushing the union is the goal of every neoliberal government starting with Thatcher and Reagan. The same model that is depicted in famous song Sixteen Tons. With replacement of the company store debt and private corporate currencies with credit card debt.

On "lesser" countries level IMF and World banks does the heavy lifting of converting countries into debt-slaves. Sometimes with the help of Wall Street firms like Goldman Sachs.

Like Trotskyism, neoliberalism is a militaristic creed, the only different is that dream of global Communist empire led from Moscow was replaced by the dream of global neoliberal empire led by Washington. Neocons in this sense is just a specific flavor of neoliberals --" neoliberals with the gun" as in Al Capone maxim "You Can Get Much Further with a Kind Word and a Gun than with a Kind Word Alone" ;-). This "institualized gangsterism" of the US neocons represents probably the greatest threat to the survival of modern civilization.

Neoliberalism elevates of market-based principles and techniques of evaluation to the level of state-endorsed norms. The authority of the neoliberal state is heavily dependent on the authority of neoliberal economics (and economists). When this authority collapses the eventual collapse of neoliberalism is imminent. This is a classic "the castle built of sand story. "

Neoliberalism in Depth

This is the end of the introduction. Due to the size the main article was moved to a separate page -- Neoliberalism in depth


Top Visited
Switchboard
Latest
Past week
Past month

NEWS CONTENTS

Old News ;-)

Home 2019 2018 2017 2016 2015 2014 2013 2011 2010 2009 2008

For the list of top articles see Recommended Links section

(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

[May 21, 2019] CounterPunch

May 21, 2019 | www.counterpunch.org

May 20, 2019 Private Equity is a Driving Force Behind Devious Surprise Billings by Eileen Appelbaum Surprise medical bills are in the news almost daily. Last Thursday, the White House called for legislation to protect patients from getting surprise doctor bills when they are rushed to the emergency room and receive care from doctors not covered by insurance at an in-network hospital.

The financial burden on patients can be substantial -- these doctor charges can amount to hundreds or even thousands of dollars.

What's behind this explosion of outrageous charges and surprise medical bills? Physicians' groups, it turns out, can opt out of a contract with insurers even if the hospital has such a contract. The doctors are then free to charge patients, who desperately need care, however much they want.

This has made physicians' practices in specialties such as emergency care, neonatal intensive care and anesthesiology attractive takeover targets for private equity firms.

As health reporter Bob Herman observed , acquisition of these health services "exemplifies private equity firms' appetite for buying health care providers that wield a lot of market power."

Emergency rooms, neonatal intensive care units and anesthesiologists' practices do not operate like an ordinary marketplace. Physicians' practices in these specialties do not need to worry that they will lose patients because their prices are too high.

Patients can go to a hospital in their network, but if they have an emergency, have a baby in the neonatal intensive care unit or have surgery scheduled with an in-network surgeon, they are stuck with the out-of-network doctors the hospital has outsourced these services to.

This stands in stark contrast to other health-care providers, such as primary-care physicians, who will lose patients if they are not in insurers' networks.

It's not only patients that are victimized by unscrupulous physicians' groups. These doctors' groups are able to coerce health insurance companies into agreeing to pay them very high fees in order to have them in their networks.

They do this by threatening to charge high out-of-network bills to the insurers' covered patients if they don't go along with these demands. High payments to these unethical doctors raise hospitals' costs and everyone's insurance premiums.

That's what happened when private equity-owned physician staffing firms took over hospital emergency rooms.

A 2018 study by Yale health economists looked at what happened when the two largest emergency room outsourcing companies -- EmCare and TeamHealth -- took over hospital ERs. They found:

" that after EmCare took over the management of emergency services at hospitals with previously low out-of-network rates, they raised out-of-network rates by over 81 percentage points. In addition, the firm raised its charges by 96 percent relative to the charges billed by the physician groups they succeeded."

TeamHealth used the threat of sending high out-of-network bills to the insurance company's covered patients to gain high fees as in-network doctors. The researchers found:

" in most instances, several months after going out-of-network, TeamHealth physicians rejoined the network and received in-network payment rates that were 68 percent higher than previous in-network rates."

What the Yale study failed to note, however, is that EmCare has been in and out of PE hands since 2005 and is currently owned by KKR. Blackstone is the once and current owner of TeamHealth, having held it from 2005 to 2009 before buying it again in 2016.

Private equity has shaped how these companies do business. In the health-care settings where they operate, market forces do not constrain the raw pursuit of profit. People desperate for care are in no position to reject over-priced medical services or shop for in-network doctors.

Private equity firms are attracted by this opportunity to reap above-market returns for themselves and their investors.

Patients hate surprise medical bills, but they are very profitable for the private equity owners of companies like EmCare (now called Envision) and TeamHealth. Fixing this problem may be more difficult than the White House imagines.

This column first appeared on The Hill .

[May 21, 2019] Google, Intel Others Cut Ties With Huawei As Trade War Heats Up

May 21, 2019 | www.zerohedge.com

Washington announced last week that it would impose new prohibitions on Huawei, including a ban on US companies selling components or services to the telecoms giant. The seriousness of these actions is difficult to understate, as Rosenblatt Securities analyst Ryan Koontz explained. If Huawei is pushed to the brink of collapse, Beijing might label this 'an act of war'.

"The extreme scenario of Huawei's telecom network unit failing would set China back many years and might even be viewed as an act of war by China," Koontz wrote. "Such a failure would have massive global telecom market implications."

But bringing a massive global Chinese firm to its knees is one way to demonstrate to Beijing, and the rest of the world, which ignored Washington's warnings about Huawei, the true reach of American economic power. And it's one way to put a timer on talks with Beijing, ensuring that the trade skirmish won't drag on until the height of campaign season.

American firms weren't the only ones to act. In Europe, German chipmaker Infineon Technologies said it would suspend deliveries to Huawei, at least until it has had a chance to determine the significance of Washington's executive order (though company sources later denied these reports and said shipments to Huawei would continue).

Since hostilities with the US began, Huawei has been stockpiling components. It now has enough of a buffer supply to keep its business running without interruption for at least three months. Nikkei reported late last week that Huawei had reportedly asked suppliers to help it build up enough stockpiles to last it a year, but it's unlikely that Huawei has accumulated enough buffer stock to last it anywhere near as long.

If Washington refuses to back down, this three-month window might become the next critical deadline for the trade talks.

If it wasn't clear before, we now know that President Trump wasn't kidding when he said late last year that Huawei could become 'a bargaining chip' in the trade skirmish. Whether the prosecution of Meng Wanzhou factors into it remains to be seen, but President Trump did tell Fox News over the weekend that he wouldn't allow China to surpass the US on his watch.

Huawei's odds of finding replacement suppliers are slim, as Koontz explained. Huawei "is heavily dependent on U.S. semiconductor products and would be seriously crippled without supply of key U.S. components."

It's clear where Beijing stands on this. We wouldn't be surprised to see a 'consumer movement' emerge in China where middle-class consumers ditch foreign phones and proudly proclaim their support for Huawei.

pic.twitter.com/iAdB3MCJK7

-- Hu Xijin 胡锡进 (@HuXijin_GT) May 20, 2019

On Sunday afternoon, President Trump threatened Iran with military intervention via tweet. Yet, analysts blamed the growing pressure on Huawei for the risk-averse trading atmosphere.

US stocks were on track to open lower. Meanwhile, Huawei's dollar-denominated corporate bonds tumbled again on Monday after one of their biggest declines in recent memory on Friday. The selloff comes as fears of a Huawei bankruptcy are beginning to intensify.

Beijing has maintained its aggressive posture, with its Ministry of Foreign Affairs warning in response to news of the Google ban that China would do what it needed to do to protect its companies' "legitimate rights", and also hinted at legal actions it might take. Over the weekend, Beijing compared the trade skirmish with its actions in the Korean War, about as clear a sign as any that we're in for a protracted conflict.

Whatever happens, it looks like the showdown over Huawei has eclipsed the broader trade-war narrative. So much for the Huawei crackdown being a 'separate issue' from the trade talks, like Trump officials had previously insisted.

Bottom line: If we don't get a deal by the end of June, this trade war is going to really heat up.


me or you , 2 minutes ago link

Imaging a phone without Google spyware or Intel backdoors...it's a win win for all of us.

frankthecrank , 5 minutes ago link

So, Huawei is dependent upon Western semiconductor manufacturers. But I thought the Chinese were the leaders in innovation? That's all I hear on here and elsewhere. Seems to me that they should have invented and created their own semiconductor industry back in the 1800's when Westerners began to mess with them. One would think that the great and powerful and super duper intelligent Chinese would have discovered and invented it first in the first place. Certainly the Chinese or their pals in the USSR could have done so sometime in the '50s, '60s, '70s, '80s or '90s? No?

Herdee , 6 minutes ago link

Christine Lagarde and the IMF team in China:

http://www.xinhuanet.com/english/2019-04/24/c_138005457.htm

giovanni_f , 13 minutes ago link

The US might win this battle but it has already lost the war. It is in a position similar to Ukraine which was the richest and most developed Sovjet republic after the breakup - but which is now one of the biggest shitholes in the entire Galaxy, feasted upon by a bunch of Zionazi oligarchs. Think of the US as an Ukraine on steroids.

Trump and his diverse actions will hurt Huawei. Maybe even badly. Long term, maybe even short term, the US won't gain anything from it. It is in a position where it can only lose. Not because the potential of the US isn't "terrific" (actually it coud be the most promising country) - but because the US is designed to fail as it is basically a failed state already.

admin user , 14 minutes ago link

Alphabet has announced that it will cut off Huawei Mobile's access to most of its Android operating system offerings

android is open source, anyone can download and modify it

you just wont get Google Play Store

What good is a phone call if you're unable to speak?

cledus , 17 minutes ago link

The real prob as I see it, Huawei can not be monitored or hacked into by the NSA, CIA and all the other US intelligence agencies.

They've been shut out and don't like it.

Spaced Out , 19 minutes ago link

Lol, there are already better alternatives to android, such as /e/. This dumb move will only hasten the demise of google, etc. Mugs!

Herdee , 27 minutes ago link

Chinese news:

http://www.xinhuanet.com/english/home.htm

HopefulJoe , 34 minutes ago link

Google is EVIL, no way they are walking away from an evil company, have they walked away from China also? No, they are giving them code daily...

To Hell In A Handbasket , 44 minutes ago link

The beginning of USSA mercantilism being played out. The USSA simply cannot compete and lagging behind in 5G is only the start.

CheapBastard , 33 minutes ago link

We have some of the best software engineers in the world...ask Sameer and Raja in our IT department.

Shockwave , 44 minutes ago link

Im confused, how would not choosing to do business with Huawei possibly be considered an act of war?

Especially when China largely keeps their markets closed to the west?

After speaking to some Chinese immigrrants... according to them, they'll never come to any kind of fair agreement with the west. They're not interested in a level playing field at all. All they care about is making sure the Chinese state gets all the benefits in order to further Chinas power and influence.

silverwolf888 , 53 minutes ago link

Great news. Huawei already has completed development of its own OS, no doubt an Android clone. This finally gives us a path off of the Goolag/ Android OS. In 19 months Rabbi Trump will be gone, which is good, but his destroying the Android monopoly may be his biggest achievement.

yerfej , 45 minutes ago link

An android clone? No way that would be stealing again. No they will make their own special sauce OS that will electrocute the citizen if they don't adhere to the state directives.

DelusionsCrowded , 39 minutes ago link

There are so many other better ways to run a phone interface , I wonder if these two systems have been kept as monopolies so that the Spooks at the NSA and CIA are able to find their way around easily

[May 20, 2019] May be tensions with Iran is the USA neocons strategy of containing China by depriving it economy of oil

China is Iran strategic ally. It will continue to buy Iranian oil.
May 20, 2019 | www.nakedcapitalism.com

charles 2 , May 20, 2019 at 6:43 am

Or maybe it is just one front: I.e. making globalisation difficult for the Chinese :
by pushing non Chinese Asians countries to de-integrate their supply chains with China and
by cutting its supply of oil though shortages induced by tensions in the Gulf.
The US knows that it can't be the sole superpower anymore any longer, so the strategy is to reverse globalisation so that no other global superpower (a Russian-Chinese with a dominating Persia in the Middle East) can emerge.
Far too early to say if the strategy will be successful or not.
As far as I am concerned, the silver linings would be that a long period of oil shortage could finally be the trigger to switch industrial infrastructure worldwide away from liquid and gaseous fossils, and that less globalised supply chain would be more robust to shocks, but if these silver linings were the ultimate goals, I could think of less adversarial ways to achieve that globally, with less money wasted on the military

jackson , May 20, 2019 at 8:41 am

The benefits of joint pricing mechanisms are also enormous. Currently, Iran has no choice because of the sanctions but to sell its oil – including from the shared fields – at massively reduced pricing that is comprised of its official selling price (OSP) minus the sanctions discount minus the incremental risk discount. This has resulted in Iran offering 'cost, insurance, and freight' cargoes for 'free on board' pricing, with the difference between the two covered by Iran. "Under this new agreement, Iranian oil from these shared fields will be sold based on Iraq's much higher three month moving average OSP pricing for cargoes, with no discounts at all, and the three month moving average for the effective spot market that Iraq has created and now controls," said the oil source.

https://acdn.adnxs.com/ib/static/usersync/v3/async_usersync.html

https://eus.rubiconproject.com/usync.html

https://c.deployads.com/sync?f=html&s=2343&u=https%3A%2F%2Fwww.nakedcapitalism.com%2F2019%2F05%2Fon-the-cusp-of-war-why-iran-wont-fold.html <img src="http://b.scorecardresearch.com/p?c1=2&c2=16807273&cv=2.0&cj=1" />

Geo , May 20, 2019 at 3:02 am

Thanks for the in-depth info. Lots to digest and research.

the US has acted in such bad faith so often in the early stages of conflicts that it's sensible to wonder how much of this account is accurate. It is very frustrating to be dealing with an informational hall of mirrors.

It's depressing to say but I when I read anything from domestic official sources or the media I can't help but think it's mostly lies. Not under the illusion that foreign actors are all righteous and benevolent, but as you said, our nation's track record with the truth in these scenarios is pretty tainted at this point. Just as we found out with Saddam and Qaddafi, these leaders have little reason to poke the dragon, and a lot of reason to build up defenses.

https://acdn.adnxs.com/ib/static/usersync/v3/async_usersync.html

https://eus.rubiconproject.com/usync.html

https://c.deployads.com/sync?f=html&s=2343&u=https%3A%2F%2Fwww.nakedcapitalism.com%2F2019%2F05%2Fon-the-cusp-of-war-why-iran-wont-fold.html <img src="http://b.scorecardresearch.com/p?c1=2&c2=16807273&cv=2.0&cj=1" />

PlutoniumKun , May 20, 2019 at 5:35 am

Interesting observations if true, and they certainly do make sense of a lot of the things that have been happening.

I see it hasn't dissuaded Trump though, this morning he is reported as doubling down on his threats to Iran. A big fear now is that Iran does not seem to be in the mood to give Trump the sort of symbolic 'win' he can use to climb down gracefully (and sack Bolton). The Saudi's can probably be scared into stepping back, but the Israeli's and the neocons want a hot war.

Its easy to see this gradually ratchet up step by step into an uncontrolled region wide conflict.

Ignim Brites , May 20, 2019 at 8:54 am

Not sure what to make of this article but the Anglo-American press is not providing much context for the recent ratcheting up of confrontation with Iran.

NotTimothyGeithner , May 20, 2019 at 10:11 am

The MSM is mostly stenographers and right leaning pundits. If no one tells them, they wouldn't know.

Also, the DC elites were pretty irked by Obama's Iran deal. They deferred to Obama and the Europeans who demanded the deal, but I think they live in a world where DC's enemies are the enemies of the American people who overwhelmingly supported the Iran deal. DC hasn't come to grips with this.

JBird4049 , May 20, 2019 at 12:20 pm

but I think they live in a world where DC's enemies are the enemies of the American people who overwhelmingly supported the Iran deal. DC hasn't come to grips with this.

Yes, because all pain, real blood and death, misery and horror that they cause in fighting what they assume putatively are "the American people's enemies" are never suffered by them, but only everyone else including the American people; all the financial benefits do go to them so it is all gain and no cost.

Ian Perkins , May 20, 2019 at 9:11 am

Will Lavrov and Wang Yi's guarantees prevent an Israeli nuclear attack on Iranian facilities, followed by US pledges to fully support Israel's right to self defence?

jackson , May 20, 2019 at 10:01 am

There are two kinds of weapons in the world offensive and defensive. The latter are cheaper, a fighter plane compared to a bomber. If a country does not (or cannot afford to) have offensive intent, it makes sense to focus on defense. It is what Iran has done. Moreover, its missile centered defense has a modern deadly twist -- the missiles are precision-guided. As an Iranian general remarked when questioned about the carrier task force: some years ago it would've been a threat he opined; now it's a target. Iran also has a large standing army of 350,000 plus a 120,000 strong Revolutionary Guard and Soviet style air defenses. In 2016 Russia started installation of the S-300 system. It has all kinds of variants, the most advanced, the S-300 PMU-3 has a range similar to the S-400 if equipped with 40N6E missiles, which are used also in the S-400. Their range is 400 km, so the Iranian batteries are virtually S-400s. The wily Putin has kept trump satisfied with the S-300 moniker without short-changing his and China's strategic ally. The latter continuing to buy Iranian oil.

Iran has friends in Europe also. Angela Merkel in particular has pointed out that Iran has complied fully with the nuclear provisions of the UN Security Council backed Joint Comprehensive Plan of Action i.e. the Iran nuclear deal. She is mustering the major European powers. Already alienated with Trump treating them as adversaries rather than friends, they find Trump's bullying tiresome. President Macron, his poll ratings hitting the lowest, is hardly likely to engage in Trump's venture. In Britain, Theresa May is barely able to hold on to her job. In the latest thrust by senior members of her party, she has been asked to name the day she steps down.

So there we have it. Nobody wants war with Iran. Even Israel, so far without a post-election government does not want to be rained upon by missiles leaky as its Iron Dome was against homemade Palestinian rockets. Topping all of this neither Trump nor Secretary of State Pompeo want war. Trump is as usual trying to bully -- now called maximum pressure -- Iran into submission. It won't. The wild card is National Security Adviser John Bolton. He wants war. A Gulf of Tonkin type false flag incident, or an Iranian misstep, or some accident can still set it off. In Iran itself, moderates like current President Hassan Rouhani are being weakened by Trump's shenanigans. The hard liners might well want to bleed America as happened in Iraq and Afghanistan.

Thomas P , May 20, 2019 at 12:13 pm

I don't trust those air defenses too much, where have they ever performed well? The scary part is where Iran assumes that USA can through repeated air strikes wipe out their missiles. They will from the start find themselves in a "use them or lose them" scenario and may launch everything as response to even a limited US strike, since they can't know if it is limited or the beginning of a full scale attack, and I doubt Iran is willing to go down without doing everything it can to hurt their enemies. (Possibly excluding Israel which is crazy enough to go nuclear in response).

[May 20, 2019] On The Cusp Of War Why Iran Won't Fold

May 20, 2019 | www.nakedcapitalism.com

Yves here. Glenn F sent along this story about recent events in the US-Iran conflict, many of which don't appear to have been reported in the English language press. Interestingly, the article takes the position that it is the Saudis that have been doing their best and largely succeeding in suppressing these reports.

Going into the weekend, it looked as if the US was trying to turn down the Iran threat meter a notch. Both Iran and the Saudis said they didn't want war but were prepared for one. Then a mystery rocket landed in the Green Zone in Baghdad. Oopsie. From the Wall Street Journal:

No major destruction was inflicted by the rocket, which landed near a museum displaying old planes and caused some damage to a building used by security guards, according to an official in the interior ministry.

The interior ministry official, who declined to be identified, said the rocket had landed around a kilometer from the U.S. Embassy inside Baghdad's Green Zone, where many other diplomatic missions and Iraqi government offices are located.

No group claimed responsibility. But security officials said security forces had found and seized a mobile rocket launcher in an area of Baghdad where Shiite militias, including some with close links to Iran, have a presence.

But also note this:

The Trump administration last week ordered a partial evacuation of its diplomatic missions in Baghdad and Erbil citing increased threats posed by Iran and its allies in Iraq. The Iraqi government has varying degrees of control over an array of armed groups, some of which are closely affiliated with Iran.

... ... ...

[May 20, 2019] Wang also reiterated the principled stand against the "long-arm jurisdiction" imposed by the United States

May 20, 2019 | www.moonofalabama.org

psychohistorian , May 19, 2019 10:55:01 PM | 6

Below is my final Xinhuanet link about China/US relations

Chinese FM urges US to avoid further damage of ties in phone call with Pompeo

The take away quote
"
Wang also reiterated the principled stand against the "long-arm jurisdiction" imposed by the United States.
"
Empire is having its hand slapped back in Venezuela, Iran, Syria, ???

Where are they going to get their war on?

I see empire as a war junkie and they are starting to twitch in withdrawals which is dangerous but a necessary stage. Trumps latest tweets show that level of energy.

The spinning plates of empire are not wowing the crowds like before.....what is plan Z?

[May 20, 2019] We must maintain the mechanisms for deterring potential competitors from even aspiring to a larger regional or global role.

May 20, 2019 | www.moonofalabama.org

Nemesiscalling , May 19, 2019 5:18:09 PM | 6

Sasha , May 19, 2019 5:26:49 PM | 7

On the alleged Arendt´s banality of evil, well, some more evil than others, if not because o of their clearly over the top ambitions:

Interesting comment linking some sources and articles on US military strategy from decades ago , some of which I am not able to get to anymore, as the article at ICH numbered 3011:

"First published From Parameters, Summer 1997, pp. 4-14: US Army War College: "There will be no peace. At any given moment for the rest of our lifetimes, there will be multiple conflicts in mutating forms around the globe. Violent conflict will dominate the headlines, but cultural and economic struggles will be steadier and ultimately more decisive. The de facto role of the US armed forces will be to keep the world safe for our economy and open to our cultural assault. To those ends, we will do a fair amount of killing."

"Excerpts From Pentagon's Plan: 'Prevent the Re-Emergence of a New Rival':

"Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union.

This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power. These regions include Western Europe, East Asia, the territory of the former Soviet Union, and Southwest Asia.

There are three additional aspects to this objective: First, the U.S. must show the leadership necessary to establish and protect a new order that holds the promise of convincing potential competitors that they need not aspire to a greater role or pursue a more aggressive posture to protect their legitimate interests.

Second, in the non-defense areas, we must account sufficiently for the interests of the advanced industrial nations to discourage them from challenging our leadership or seeking to overturn the established political and economic order. Finally, we must maintain the mechanisms for deterring potential competitors from even aspiring to a larger regional or global role. An effective reconstitution capability is important here, since it implies that a potential rival could not hope to quickly or easily gain a predominant military position in the world."

... access to vital raw materials, primarily Persian Gulf oil"


[May 20, 2019] So we went from Russia meddling to China meddling? Really? Is that the new normal in Politics campaigning strategy nowadays?

The idea is simple: If we do not like the country we automatically assume it is meddling in our elections ;-)
May 20, 2019 | www.zerohedge.com

BitchesBetterRecognize , 28 minutes ago link

So we went from Russia meddling to China meddling? Really? Is that the new normal in Politics campaigning strategy nowadays?

what's next: Iran meddling? Turkey Meddling? Venezuelan Meddling?

[May 20, 2019] "Us" Versus "Them"

Highly recommended!
Notable quotes:
"... There are differences between the parties, but they are mainly centered around social issues and disputes with little or no consequence to the long-term path of the country. The real ruling oligarchs essentially allow controlled opposition within each party to make it appear you have a legitimate choice at the ballot box. Nothing could be further from the truth. ..."
"... There has been an unwritten agreement between the parties for decades where the Democrats pretend to be against war and the Republicans pretend to be against welfare. Meanwhile, spending on war and welfare relentlessly grows into the trillions, with no effort whatsoever from either party to even slow the rate of growth, let alone cut spending. The proliferation of the military industrial complex like a poisonous weed has been inexorable, as the corporate arms dealers place their facilities of death in the congressional districts of Democrats and Republicans. In addition, these corporate manufacturers of murder dole out "legal" payoffs to corrupt politicians of both parties in the form of political contributions. The Deep State knows bribes and well-paying jobs ensure no spineless congressman will ever vote against a defense spending increase. ..."
"... Of course, the warfare/welfare state couldn't grow to its immense size without financing from the Wall Street cabal and their feckless academic puppets at the Federal Reserve. The Too Big to Trust Wall Street banks, whose willful control fraud nearly wrecked the global economy in 2008, were rewarded by their Deep State patrons by getting bigger and more powerful as people on Main Street and senior citizen savers were thrown under the bus. ..."
"... When these criminal bankers have their reckless bets blow up in their faces they are bailed out by the American taxpayers, but when the Fed rigs the system so they are guaranteed billions in risk free profits, they reward themselves with massive bonuses and lobby for a huge tax cut used to buy back their stock. With bank branches in every congressional district in every state, and bankers spreading protection money to greedy politicians across the land, no legislation damaging to the banking cartel is ever passed. ..."
"... I voted for Trump because he wasn't Hillary. ..."
"... If the Chinese refuse to yield for fear of losing face, and the tariff war accelerates, a global recession is a certainty. ..."
"... These sociopaths are not liberal or conservative. They are not Democrats or Republicans. They are not beholden to a country or community. They care not for their fellow man. They don't care about future generations. They care about their own power, wealth and control over others. They have no conscience. They have no empathy. Right and wrong are meaningless in their unquenchable thirst for more. They will lie, steal and kill to achieve their goal of controlling everything and everyone in this world. This precisely describes virtually every politician in Washington DC, Wall Street banker, mega-corporation CEO, government agency head, MSM talking head, church leader, billionaire activist, and blood sucking advisor to the president. ..."
"... The problem is we have gone too far. The "American Dream" has become a grotesque nightmare because people by the millions sit around and dream about being a Kardashian. Makes me want to puke. ..."
May 20, 2019 | www.zerohedge.com

Authored by Jim Quinn via The Burning Platform blog,

"I'll show you politics in America. Here it is, right here. "I think the puppet on the right shares my beliefs." "I think the puppet on the left is more to my liking." "Hey, wait a minute, there's one guy holding out both puppets!"" – Bill Hicks

Anyone who frequents Twitter, Facebook, political blogs, economic blogs, or fake-news mainstream media channels knows our world is driven by the "Us versus Them" narrative. It's almost as if "they" are forcing us to choose sides and believe the other side is evil. Bill Hicks died in 1994, but his above quote is truer today then it was then. As the American Empire continues its long-term decline, the proles are manipulated through Bernaysian propaganda techniques, honed over the course of decades by the ruling oligarchs, to root for their assigned puppets.

Most people can't discern they are being manipulated and duped by the Deep State controllers. The most terrifying outcome for these Deep State controllers would be for the masses to realize it is us versus them. But they don't believe there is a chance in hell of this happening. Their arrogance is palatable.

Their hubris has reached astronomical levels as they blew up the world economy in 2008 and successfully managed to have the innocent victims bail them out to the tune of $700 billion, pillaged the wealth of the nation through their capture of the Federal Reserve (QE, ZIRP), rigged the financial markets in their favor through collusion, used the hundreds of billions in corporate tax cuts to buy back their stock and further pump the stock market, all while their corporate media mouthpieces mislead and misinform the proles.

There are differences between the parties, but they are mainly centered around social issues and disputes with little or no consequence to the long-term path of the country. The real ruling oligarchs essentially allow controlled opposition within each party to make it appear you have a legitimate choice at the ballot box. Nothing could be further from the truth.

There has been an unwritten agreement between the parties for decades where the Democrats pretend to be against war and the Republicans pretend to be against welfare. Meanwhile, spending on war and welfare relentlessly grows into the trillions, with no effort whatsoever from either party to even slow the rate of growth, let alone cut spending. The proliferation of the military industrial complex like a poisonous weed has been inexorable, as the corporate arms dealers place their facilities of death in the congressional districts of Democrats and Republicans. In addition, these corporate manufacturers of murder dole out "legal" payoffs to corrupt politicians of both parties in the form of political contributions. The Deep State knows bribes and well-paying jobs ensure no spineless congressman will ever vote against a defense spending increase.

Of course, the warfare/welfare state couldn't grow to its immense size without financing from the Wall Street cabal and their feckless academic puppets at the Federal Reserve. The Too Big to Trust Wall Street banks, whose willful control fraud nearly wrecked the global economy in 2008, were rewarded by their Deep State patrons by getting bigger and more powerful as people on Main Street and senior citizen savers were thrown under the bus.

When these criminal bankers have their reckless bets blow up in their faces they are bailed out by the American taxpayers, but when the Fed rigs the system so they are guaranteed billions in risk free profits, they reward themselves with massive bonuses and lobby for a huge tax cut used to buy back their stock. With bank branches in every congressional district in every state, and bankers spreading protection money to greedy politicians across the land, no legislation damaging to the banking cartel is ever passed.

I've never been big on joining a group. I tend to believe Groucho Marx and his cynical line, "I don't care to belong to any club that will have me as a member". The "Us vs. Them" narrative doesn't connect with my view of the world. As a realistic libertarian I know libertarian ideals will never proliferate in a society of government dependency, willful ignorance of the masses, thousands of laws, and a weak-kneed populace afraid of freedom and liberty. The only true libertarian politician, Ron Paul, was only able to connect with about 5% of the voting public. There is no chance a candidate with a libertarian platform will ever win a national election. This country cannot be fixed through the ballot box. Bill Hicks somewhat foreshadowed the last election by referencing another famous cynic.

"I ascribe to Mark Twain's theory that the last person who should be President is the one who wants it the most. The one who should be picked is the one who should be dragged kicking and screaming into the White House." ― Bill Hicks

Hillary Clinton wanted to be president so badly, she colluded with Barack Obama, Jim Comey, John Brennan, James Clapper, Loretta Lynch and numerous other Deep State sycophants to ensure her victory, by attempting to entrap Donald Trump in a concocted Russian collusion plot and subsequent post-election coup to cover for their traitorous plot. I wouldn't say Donald Trump was dragged kicking and screaming into the White House, but when he ascended on the escalator at Trump Tower in June of 2015, I'm not convinced he believed he could win the presidency.

As the greatest self-promoter of our time, I think he believed a presidential run would be good for his brand, more revenue for his properties and more interest in his reality TV ventures. He was despised by the establishment within the Republican and Democrat parties. The vested interests controlling the media and levers of power in society scorned and ridiculed this brash uncouth outsider. In an upset for the ages, Trump tapped into a vein of rage and disgruntlement in flyover country and pockets within swing states, to win the presidency over Crooked Hillary and her Deep State backers.

I voted for Trump because he wasn't Hillary. I hadn't voted for a Republican since 2000, casting protest votes for Libertarian and Constitutional Party candidates along the way. I despise the establishment, so their hatred of Trump made me vote for him. His campaign stances against foreign wars and Federal Reserve reckless bubble blowing appealed to me. I don't worship at the altar of the cult of personality. I judge men by their actions and not their words.

Trump's first two years have been endlessly entertaining as he waged war against fake news CNN, establishment Republicans, the Deep State coup attempt, and Obama loving globalists. The Twitter in Chief has bypassed the fake news media and tweets relentlessly to his followers. He provokes outrage in his enemies and enthralls his worshipers. With millions in each camp it is difficult to find an unbiased assessment of narrative versus real accomplishments.

I'm happy he has been able to stop the relentless leftward progression of our Federal judiciary. Cutting regulations and rolling back environmental mandates has been a positive. Exiting the Paris Climate Agreement and TPP, forcing NATO members to pay their fair share, and renegotiating NAFTA were all needed. Ending the war on coal and approving pipelines will keep energy costs lower. His attempts to vet Muslims entering the country have been the right thing to do. Building a wall on our southern border is the right thing to do, but he should have gotten it done when he controlled both houses.

The use of tariffs to force China to renegotiate one sided trade deals as a negotiating tactic is a high-risk, high reward gamble. If his game of chicken is successful and he gets better terms from the Chicoms, while reversing the tariffs, it would be a huge win. If the Chinese refuse to yield for fear of losing face, and the tariff war accelerates, a global recession is a certainty. Who has the upper hand? Xi is essentially a dictator for life and doesn't have to worry about elections or popularity polls. Dissent is crushed. A global recession and stock market crash would make Trump's re-election in 2020 problematic.

I'm a big supporter of lower taxes. The Trump tax cuts were sold as beneficial to the middle class. That is a false narrative. The vast majority of the tax cut benefits went to mega-corporations and rich people. Middle class home owning families with children received little or no tax relief, as exemptions were eliminated and tax deductions capped. In many cases, taxes rose for working class Americans.

With corporate profits at all time highs, massive tax cuts put billions more into their coffers. They didn't repatriate their overseas profits to a great extent. They didn't go on a massive hiring spree. They didn't invest in new facilities. They did buy back their own stock to help drive the stock market to stratospheric heights. So corporate executives gave themselves billions in bonuses, which were taxed at a much lower rate. This is considered winning in present day America.

The "Us vs. Them" issue rears its ugly head whenever Trump is held accountable for promises unkept, blatant failures, and his own version of fake news. Holding Trump to the same standards as Obama is considered traitorous by those who only root for their home team. Their standard response is that you are a Hillary sycophant or a turncoat to the home team. If you agree with a particular viewpoint or position of a liberal then you are a bad person and accused of being a lefty by Trump fanboys. Facts don't matter to cheerleaders. Competing narratives rule the day. Truthfulness not required.

The refusal to distinguish between positive actions and negative actions when assessing the performance of what passes for our political leadership by the masses is why cynicism has become my standard response to everything I see, hear or he read. The incessant level of lies permeating our society and its acceptance as the norm has led to moral decay and rampant criminality from the White House, to the halls of Congress, to corporate boardrooms, to corporate newsrooms, to government run classrooms, to the Vatican, and to households across the land. It's interesting that one of our founding fathers reflected upon this detestable human trait over two hundred years ago.

"It is impossible to calculate the moral mischief, if I may so express it, that mental lying has produced in society. When a man has so far corrupted and prostituted the chastity of his mind as to subscribe his professional belief to things he does not believe, he has prepared himself for the commission of every other crime." – Thomas Paine

Thomas Paine's description of how moral mischief can ruin a society was written when less than 3 million people inhabited America. Consider his accurate assessment of humanity when over 300 million occupy these lands. The staggering number of corrupt prostituted sociopaths occupying positions of power within the government, corporations, media, military, churches, and academia has created a morally bankrupt empire of debt.

These sociopaths are not liberal or conservative. They are not Democrats or Republicans. They are not beholden to a country or community. They care not for their fellow man. They don't care about future generations. They care about their own power, wealth and control over others. They have no conscience. They have no empathy. Right and wrong are meaningless in their unquenchable thirst for more. They will lie, steal and kill to achieve their goal of controlling everything and everyone in this world. This precisely describes virtually every politician in Washington DC, Wall Street banker, mega-corporation CEO, government agency head, MSM talking head, church leader, billionaire activist, and blood sucking advisor to the president.

The question pondered every day on blogs, social media, news channels, and in households around the country is whether Trump is one of Us or one of Them. The answer to that question will strongly impact the direction and intensity of the climactic years of this Fourth Turning. What I've noticed is the shunning of those who don't take an all or nothing position regarding Trump. If you disagree with a decision, policy, or hiring decision by the man, you are accused by the pro-Trump team of being one of them (aka liberals, lefties, Hillary lovers).

If you don't agree with everything Trump does or says, you are dead to the Trumpeteers. I don't want to be Us or Them. I just want to be me. I will judge everyone by their actions and their results. I can agree with Trump on many issues, while also agreeing with Tulsi Gabbard, Rand Paul, Glenn Greenwald or Matt Taibbi on other issues. I don't prescribe to the cult of personality school of thought. I didn't believe the false narratives during the Bush or Obama years, and I won't worship at the altar of the Trump narrative now.

In Part II of this article I'll assess Trump's progress thus far and try to determine whether he can defeat the Deep State.


TerryThomas , 32 minutes ago link

"The scientific and industrial revolution of modern times represents the next giant step in the mastery over nature; and here, too, an enormous increase in man's power over nature is followed by an apocalyptic drive to subjugate man and reduce human nature to the status of nature. Even where enslavement is employed in a mighty effort to tame nature, one has the feeling that the effort is but a tactic to legitimize total subjugation. Thus, despite its spectacular achievements in science and technology, the twentieth century will probably be seen in retrospect as a century mainly preoccupied with the mastery and manipulation of men. Nationalism, socialism, communism, fascism, and militarism, cartelization and unionization, propaganda and advertising are all aspects of a general relentless drive to manipulate men and neutralize the unpredictability of human nature. Here, too, the atmosphere is heavy-laden with coercion and magic." --Eric Hoffer

666D Chess , 11 minutes ago link

Divide and conquer, not a very novel idea... but very effective.

Kafir Goyim , 32 minutes ago link

If you don't agree with everything Trump does or says, you are dead to the Trumpeteers

That's not true. When Trump kisses Israeli ***, most "Trumpeteers" are outraged. That does not mean they're going to vote for Joe "I'm a Zionist" Biden, or Honest Hillary because of it, but they're still pissed.

Rich Monk , 33 minutes ago link

These predators (((them))) need to fear the Victims, us! That is what the 2ND Amendment is for. It's coming, slowly for now, but eventually it speeds up.

yellowsub , 42 minutes ago link

Ya'll a dumb fool if you think gov't as your best interests first.

legalize , 46 minutes ago link

Citation needed.

Any piece like this better be littered with footnotes and cited sources before I'm swallowing it.

I'll say it again: this is the internet, people. There's no "shortage of column space" to include links back to primary sources for your assertions. Otherwise, how am I supposed to distinguish you from another "psy op" or "paid opposition hit piece"?

bshirley1968 , 51 minutes ago link

"The question pondered every day on blogs, social media, news channels, and in households around the country is whether Trump is one of Us or one of Them."

If you still ponder this question, then you are pretty frickin' thick. It is obvious at this point, that he betrayed everything he campaigned on. You don't do that and call yourself one of "us".......damn sure aren't one of "me".

If I couldn't keep my word and wouldn't do what it takes to do what is right.....then I would resign. But I would not go on playing politics in a world that needs some real leadership and not another political hack.

The real battle is between Truth and Lie. No matter the name of your "team" or the "side" you support. Truth is truth and lies are lies. We don't stand for political parties, we stand for truth. We don't stand for national pride, we take pride in a nation that is truthful and trustworthy. The minute a "side" or "team" starts lying.....and justifying it.....that is the minute they become them and not one of us.

Any thinking person in this country today knows we are being lied to by the entire complex. Until someone starts telling the truth.....we are on our own. But I be damned before I am going to support any of these lying sons of bitches......and that includes Trump.

Fish Gone Bad , 37 minutes ago link

Dark comedy. All the elections have been **** choices until the last one. Take a look at Arkancide.com and start counting the bodies.

Anyone remember the news telling us how North Korea promised to turn the US into a sea of fire?? Trump absolutely went to bat for every single American to de-escalate that situation.

bshirley1968 , 31 minutes ago link

Don't tell me about Arkancide or the Clintons. I grew up in Arkansas with that sack of **** as my governor for 12 years.

NK was never a real threat to anyone. Trump didn't do ****. NK is back to building and shooting off missiles and will be teaming up with the Russians and Chinese. You are a duped bafoon.

Kafir Goyim , 28 minutes ago link

I don't think anybody thought NK was an existential threat to the US. It has still been nice making progress on bringing them back into the world and making them less of a threat to Japan and S. Korea. Trump did that.

Giant Meteor , 9 minutes ago link

Dennis Rodman did that, or that is to say, Trump an extension thereof ..

Great theater..

Look, i thought it was great that Trump went Kim Unning. I mean after all, i had talked with a few elderly folks that get their news directly from the mainstream of mainstream, vanilla news reportage. Propaganda central casting. I remember them being extremely concerned, outright petrified about that evil menace, kim gonna launch nukes any minute now. If the news would have been announced a major troop mobilization, bombing campaigns, to begin immediately they would have been completely onboard, waving the flag.

Frankly, it is only a matter of time, and folks can speculate on the country of interest, but it is coming soon to a theater near you. So many being in the crosshairs. Iran i suspect .. that's the big prize, that makes these sociopaths cream in their panties.

Probably. In the second term .. and so far, if ones honestly evaluates the "brain trust" / current crop of dimwit opposition, and in light of their past 2 plus years of moronic posturing with their hair on fire, trump will get his second term ..

666D Chess , 15 minutes ago link

Until the last one? You are retarded, the last election was a masterpiece of Rothschilds Productions. The Illuminati was watching you at their private cinema when you were voting for Trump and they were laughing their asses off.

HoodRatKing , 55 minutes ago link

The author does not realize that everyone in America, except Native American Indians, were immigrants drawn towards the false promise of hope that is the American Dream, turned nightmare..

Owning your own home, car, & raising a family in this country is so damn expensive & risky, that you'd have be on drugs or an idiot to even fall for the lies.

I don't see an us vs them, I see the #FakeMoney printers monetized every facet of life, own everything, & it truly is RENT-A-LIFE USSA, complete with bills galore, taxes galore, laws galore, jails & prisons galore, & the worst fkn country anyone would want to live in poverty & homelessness in.

At least in many 3rd world nations there is land to live off of & joblessness does not = a financial death sentence.

bshirley1968 , 39 minutes ago link

Sure. Lets all go back to living in huts.....off the land....no cars.....no electricity.....no running water......no roads....

There is a price to pay for things and it is not always in the form of money. We have given up some of our freedom for the ease and conveniences we want.

The problem is we have gone too far. The "American Dream" has become a grotesque nightmare because people by the millions sit around and dream about being a Kardashian. Makes me want to puke.

There is a balance. Don't take the other extreme or we never find balance.

911bodysnatchers322 , 56 minutes ago link

This article is moronic. One can easily prove that Trump is not like all the others in the poster. Has this author been living under a rock for the last 2.5 yrs? The past 5 presidents represent a group that has been literally trying to assassinate Trump, ruin his family, his reputation, his buisness and his future, for the audacity to be an ousider to the power network and steal (win) the presidency from under their noses. He's kept us OUT of war. He's dissolved the treachery that was keeping us in the middle east through gaslighitng and a proxy fake war that is ISIS, the globalists' / nato / fiveys / uk's fake mercenary army

Giant Meteor , 25 minutes ago link

And yet, I'll never forget all the smiling faces at the gala wedding affair.

Happier times ..

https://www.nytimes.com/2015/12/30/us/politics/ex-ally-donald-trump-now-heaps-scorn-on-bill-clinton.html

And yes, thanks in advance for noting the link is from New York slime, but i believe the picture in this case anyway, was not photo shopped.

She is, (hillary) after all, good people, a real fighter ..

**** .. mission accomplished ..

ExPat2018 , 1 hour ago link

The greatest threat to the USA is its own dumbed down drugged up citizens who cannot compete with anyone. America is a big military powerhouse but that doens't make successful countries

You must have intelligent people

America doesn't have that anymore.

JuliaS , 1 hour ago link

Notice how modern narrative is getting manipulated. What is being reported and referenced is completely different from how things are. And knowing that we can assume that the entire history is a fabricated lie, written by the ruling class to support its status in the minds of obedient citizens.

911bodysnatchers322 , 54 minutes ago link

This article is garbage propaganda that proves that they think we aren't keeping score or paying attention. The gaslighting won't work when it relies on so much counterthink, willful ignorance, counterfacts and weaponized omissions

istt , 1 hour ago link

The reality is the de-escalation of wars, the stability of our currency and our economy, and the moral re-grounding of our culture does not occur until we do what over 100 countries have done over the centuries, beginning in Carthage in 250AD.

fersur , 1 hour ago link

There's an old saying; "Congress does 2 things well Nothing and Protest" said by Pence Live-Streamed 4 hours ago at USMCA America First speech !

Good, Bad and Ugly

The Good is President Trump works extreme daily hours trying his best !

The Bad is Haters miss every bit of whatever their President Trump does that is good !

The Ugly is Hater Reporters ignoring World events, scared of possibly shining President Trump fairly !

SHsparx , 1 hour ago link

You really are making it a bit too obvious, bro.

911bodysnatchers322 , 52 minutes ago link

The congress are statusquotarians. If they solved the problems they say they would,they'd be out of a job. and that job is sitting there acting like a naddler or toxic post turtle leprechaun with a charisma and skill level of zero. Their staff do all the work, half of them barely read, though they probably can

SHsparx , 1 hour ago link

I still think 1st and 2nd ammedment is predicated on which party rules the house. If a Dem gets into the WH, we're fucked. Kiss those Iast two dying amendments goodbye for good.

Zeusky Babarusky , 1 hour ago link

If we rely on any party to preserve the 1st or 2nd Amendments, we are already fucked. What should preserve the 1st and 2nd Amendments is the absolute fear of anyone in government even mentioning suppressing or removing them. When the very thought of doing anything to lessen the rights advocated in these two amendments, causes a politician to piss in their pants, liberty will be preserved. As it is now citizens fear the government, and as a result tyranny continues to grow and fester as a cancer.

Zoomorph , 1 hour ago link

In other words, those amendments are already lost... we're just waiting for the final dictate to come down.

Zeusky Babarusky , 1 hour ago link

You may very well be right. I still hold out hope, but upon seeing what our society is quickly morphing into, that hope seems to fade more each and every day.

SHsparx , 49 minutes ago link

@ Zeusky Babarusky

I couldn't agree with you more.

Unfortunately, it is what it is, which is why I used the word "dying."

Those two amendments are on their deathbed, and if a Dem gets in the house, that'll be the nail in the coffin.

bshirley1968 , 1 hour ago link

If you think the 1st and 2nd amendments are reliant on who is in office, then you are already done. Why don't you try growing a pair and being an American for once in your life.

I will always have a 1st and 2nd "amendment" for as long as I live. Life is meaningless without them.....as far as I am concerned. Good thing the founders didn't wait for king George to give them what they "felt" was theirs.....by the laws of Nature and Nature's God.

I hope the democrats get the power......and I hope they come for the guns......maybe then pussies like you will finally have to **** or get off the pot......for once in your life. There are worse things than dying.

Nephilim , 1 hour ago link

THEHAZELFLOCKOFCRANES

BRINDLED FOOT,

AUSTRALIAN.

caveofgoldcaveofold

Zoomorph , 1 hour ago link

"Why do we have wars?"

"Because life is war: fighting for survival, resources, and what is best in the world."

"Why do people say war is bad?"

"Because they are useful idiots who have been tricked by religion and/or weak degenerates who are too weary to participate."

delta0ne , 1 hour ago link

This country cannot be fixed through the ballot box. Unless we get rid of *** influencing from abroad and domestically. Getting rid of English King few hundred years ago was a joke! this would be a challenge because dual-citizens masquerading as locals.

blind_understanding , 1 hour ago link

Last revolution (1776) we targeted the WRONG ENEMY.

We targeted King George III instead of the private bankers who owned of the Bank of England and the issued of the British-pound currency.

George III was himself up to his ears in debt to them by 1776, when the bankers installed George Washington to replace George III as their middleman in the American colonies, by way of the phony revolution.

Phony because ownership of the central bank and currency (Federal-Reserve Banks, Federal-Reserve notes) we use, remains in the same banking families' hands to this day. The same parasite remains within our government.

djrichard , 1 hour ago link

https://www.ribbonfarm.com/2013/05/16/the-gervais-principle-vi-children-of-an-absent-god/

It is this strangely incomplete calculus that creates the shifting Loser world of rifts and alliances. By operating with a more complete calculus, Sociopaths are able to manipulate this world through the divide-and-conquer mechanisms. The result is that the Losers end up blaming each other for their losses, seek collective emotional resolution, and fail to adequately address the balance sheet of material rewards and losses.

To succeed, this strategy requires that Losers not look too closely at the non-emotional books. This is why, as we saw last time, divide-and-conquer is the most effective means for dealing with them, since it naturally creates emotional drama that keeps them busy while they are being manipulated.

[May 20, 2019] The dirty art of politicians entrapment: Blackmail, smear campaigns, various traps via honey or corruption, hookers, gay sex, pedophilia, or what-have-you, all or in combination

Highly recommended!
That remind me how old Kushner tried to smear his relative...
Notable quotes:
"... They are told that the daughter of a Russian billionaire plans large investments in Austria. It was said that she would like to help his party. The alleged daughter of the Russian billionaire, who is actually also Austrian, and her "friend" serve an expensive dinner. Alcohol flows freely. The pair offers a large party donation but asks for returns in form of mark ups on public contracts. ..."
"... The "Russian" female is notably very attractive with a slender build. There is a honey-trap angle here as well. This would likely inspire the boasting (in order to impress her) on the part of the wingnut politician. ..."
"... The far-right is the Troy Horse of transnational corporations and capital and already discredited neoliberal stablishment which comes now disguised under the softening label of "populists". Beware, there seems to be a coordinated effort at several blogs in the ten previous days of the European elections to whitewash the far-right. ..."
"... So this very much hints something more. Right now there is a debate of cocain being visible on the table but this accusation points more towards schnickle with a babe imho. The babe to his right is not that ugly, admittely. ..."
"... As expected the hysteria of "russian" meddling have now publicized to weaken FPÖ in the EU election. Winners? NATO/US parties. ..."
"... Seems indeed to be a honeypot aspect to the entrapment, and it's quite possible Strache stepped down at once to avoid that part to come to light, so that the public revelations would be limited to the economic shenanigans and influence-peddling level. ..."
"... Also, this goes to show that the bulk of our Western politicians, across all the political spectrum, are a bunch of mediocre and quite corrupt fools. For him not to smell that this was a setup from the very first minute, it must be that such proposals are common place all across the board - which will only reinforce my suspicion that our societies, peoples and mankind as a whole would only benefit if we fully wiped out our economic, financial and political establishment and started from scratches. ..."
"... Blackmail, smear campaigns, various traps via honey or corruption, hookers and blow, gay sex, paedofilia, or what-have-you, - all or in combination. Politicians are "all" compromised in these ways. Buck the system or threaten the status quo - whereby it gets somebody's serious attention and the shite hits the fan. ..."
"... The savages in this neoliberal order use the secret services to subvert democracy. Deception and manipulation are the means used to corrupt the public domain. They would push the most pliable and ruthless leaders into office. Catastrophe and violence and disinformation are their most powerful weapons. But I still think that political processes and elections do matter; and what counts is a struggle to improve and reform the system of government. Doing our best to protect and maintain the integrity of electoral processes is something that requires both protests and political campaigns. ..."
"... The very strong implication certainly seems to be that there may be further video of Strache sleeping with the honey pot. He obviously knows what happened that night. If there were video cameras hidden everywhere, that was obviously one of the intentions behind the sting from the outset. ..."
"... B, please do an article on the Nazi penetration of the German security services, Interior Ministry, Army, CDU etc, and links to the NSU affair, shredding of millions of documents by the Interior Ministry when demanded by the courts as evidence, links with the Board members and advisory board members of German big business especially Siemens and Deutche Bank and Bayer, etc. ..."
"... It is a wonder Strache's remark "Journalists are the biggest whores on the planet" and how he says he can subvert an entire media outlet to his political agenda by even firing the few remaining fringe elements. ..."
"... I don't think Strache is as harmless as you portray him, B. You fall for his defence strategy if you attribute all his statements to the influence of alcohol. At that time, the man was very confident that he would soon be at the levers of power, which then materialized. It remains to be proven whether he did not put into practice anything of what he talked about at that house in Ibiza. After all, he was talking about the by far most influential newspaper in Austria. ..."
"... Of course it is true that it is the neoliberal globalisers who have brought us to where we stand today. But that doesn' make people like Strache and Salvini any less dangerous. If they rise to total power, the result will be a naked dictatorship. Strache was beaten with his own weapons, you don't have to be under any illusions. ..."
"... Who could have ordered such an elaborate sting operation? ..."
"... The sophisticated operation using actors and a villa prepared with hidden cameras and microphones shows that this is hardly a normal case of dirty campaigning by political opponents. Most likely, either it was an action by a secret service or someone with deep pockets hired former secret agents. ..."
"... If it was an action by secret services, the most plausible explanation seems to be that Western secret services targeted Strache because FPÖ is one of the parties who is in favor of restoring normal relations with Russia ..."
"... François Fillon comes to mind, a French conservative candidate who also had a quite a friendly attitude towards Russia - shortly before the elections, it was revealed (at least claimed) that Fillon had given his wife ficticious employment, and Fillon lost popularity, which helped Macron enormously. ..."
"... Probably, some of the things Strache said during this sting operation were inacceptable, and Fillon may also not be innocent, but if there is a systematic selective targeting of European politicians who want to normalize relations with Russia by secret services, that would be a huge problem for democracy. ..."
"... In 2016, Joseph Mifsud invited George Papadopoulos to Rome and introduced him to "Putin's niece" with the intent of smearing Trump as "Russian puppet" and destroying his election chances. In 2017, someone (who?) invited Heinz-Christian Strache to Ibiza and introduced him to "Russian billionaire's niece" with the intent of smearing Strache as "Russian puppet" and destroying his party's election chances. Notice a pattern? ..."
"... This is a clear case of Germany interfering in Austrian elections. Austria should deport 60 German diplomats, shut down German embassy in Vienna, and impose sanctions on Germany. Also put a German girl interested in Austrian politics in jail for 18 months. ..."
"... Thinking about it, after revealing e-mail of HRC, Podesta etc. were published, their core supporters were enraged about the dirty trick and did not pay attention to the disclosed content, while for the core opponents of HRC she was already sufficiently vilified so the net change in voting intentions that can be attributed to that incident was modest. ..."
"... Anyone who does not directly have his or her family's nose in the EU trough at this point knows that the policies espoused by transatlantic puppets like Angela Merkel and Emmanuel Macron push our countries and our continent towards self-destruction. Life in Europe, post-1968 and pre-2013, has been pretty damn good. There's absolutely no good reason for us to rip up our traditions or turn into a continent of immigrants and mobile job seekers. ..."
"... As Strache explains in the video, Austrian dirty tricks are done "via another country". ..."
"... To those who fill that politics of Strache are obnoxious and that justifies entrapment, remembers that methods of that type are not improvised, and that means that there is an apparatus that does it. We noted similarities with provocations against George Papadopoulos. In the latter case the target was cautious, after all, we had to be well aware of such methods. But anyone who is despised by NATO establishment are similar group can be on the receiving end, think about Assange. ..."
May 20, 2019 | www.moonofalabama.org

During the last days a right wing politician in Austria was taken down by using an elaborate sting. Until Friday Heinz-Christian Strache was leader of the far right (but not fascist) Freedom Party of Austria (FPOe) and the Vice Chancellor of the country. On Friday morning two German papers, the Sueddeutsche Zeitung and Der Spiegel published (German) reports (English) about an old video that was made to take Strache down.

The FPOe has good connections with United Russia, the party of the Russian President Putin, and to other right-wing parties in east Europe. It's pro-Russian position has led to verbal attacks on and defamation of the party from NATO supporting and neoliberal circles.

In July 2017 Strache and his right hand man Johann Gudenus, who is also the big number in the FPOe, get invited for dinner to a rented villa on Ibiza, the Spanish tourist island in the Mediterranean. They are told that the daughter of a Russian billionaire plans large investments in Austria. It was said that she would like to help his party. The alleged daughter of the Russian billionaire, who is actually also Austrian, and her "friend" serve an expensive dinner. Alcohol flows freely. The pair offers a large party donation but asks for returns in form of mark ups on public contracts.

Unknown to Strache the villa is professionally bugged with many hidden cameras and microphones.


A scene from the video. Source: Der Falter (vid, German)

During the six hour long party several schemes get proposed by the "Russian" and are discussed. Strache rejects most of them. He insists several times that everything they plan or do must be legal and conform to the law. He says that a large donation could probably be funneled through an endowment that would then support his party. It is a gray area under Austrian party financing laws. They also discuss if the "Russian" could buy the Kronen Zeitung , Austria's powerful tabloid, and use it to prop up his party.

The evening goes on with several bottles of vodka on the table. Starche gets a bit drunk and boosts in front of the "oligarch daughter" about all his connections to rich and powerful people. He does not actually have these.

Strache says that, in exchange for help for his party, the "Russian" could get public contracts for highway building and repair. Currently most of such contracts in Austria go to the large Austrian company, STRABAG, that is owned by a neoliberal billionaire who opposes the FPOe. At that time Strache was not yet in the government and had no way to decide about such contracts.

At one point Strache seems to understand that the whole thing is a setup. But his right hand man calms him down and vouches for the "Russian". The sting ends with Strache and his companion leaving the place. The never again see the "Russian" and her co-plotter. Nothing they talked about will ever come to fruition.

Three month later Strache and his party win more than 20% in the Austrian election and form a coalition government with the conservative party OeVP led by Chancellor Sebastian Kurz. Even while the FPOe controls several ministries, it does not achieve much politically. It lacks a real program and the government's policies are mostly run by the conservatives.

Nearly two years after the evening on Ibiza, ten days before the European parliament election in which Strache's party is predicted to achieve good results, a video of the evening on Ibiza is handed to two German papers which are known to be have strong transatlanticist leanings and have previously been used for other shady 'leaks'. The papers do not hesitate to take part in the plot and publish extensive reports about the video.

After the reports appeared Strache immediately stepped down and the conservatives ended the coalition with his party. Austria will now have new elections.

On Bloomberg Leonid Bershidsky opines on the case:

Strache's discussion with the Russian oligarch's fake niece shows a propensity for dirty dealing that has nothing to do with idealistic nationalism. Nationalist populists often agitate against entrenched, corrupt elites and pledge to drain various swamps. In the videos, however, Strache and Gudenus behave like true swamp creatures, savoring rumors of drug and sex scandals in Austrian politics and discussing how to create an authoritarian media machine like Hungarian Prime Minister Viktor Orban's.

I do not believe that the people who voted for the FPOe (and similar parties in other countries) will subscribe to that view. The politics of the main stream parties in Austria have for decades been notoriously corrupt. Compared to them Strache and his party are astonishingly clean. In the video he insists several times that everything must stay within the legal realm. Whenever the "Russian" puts forward a likely illegal scheme, Starche emphatically rejects it.

Bershidsky continues:

Strache, as one of the few nationalist populists in government in the European Union's wealthier member states, was an important member of the movement Italian Interior Minister Matteo Salvini has been trying to cobble together ahead of the European Parliament election that will take place next week. On Saturday, he was supposed to attend a Salvini-led rally in Milan with other like-minded politicians from across Europe. Instead, he was in Vienna apologizing to his wife and to Kurz and protesting pitifully that he'd been the victim of a "political assassination" -- a poisonous rain on the Italian right-winger's parade.
...
This leaves the European far right in disarray and plays into the hands of centrist and leftist forces ahead of next week's election. Salvini's unifying effort has been thoroughly undermined, ...

This is also a misreading of the case. The right-wing parties will use the case to boost their legitimacy.

Strache was obviously set up by some intelligence services, probably a German one with a British assist. The original aim was likely to blackmail him. But during the meeting on Ibiza Strache promised and did nothing illegal. Looking for potential support for his party is not a sin. Neither is discussing investments in Austria with a "daughter of a Russian oligarch." Some boosting while drunk is hardly a reason to go to jail. When the incident provided too little material to claim that Strache is corrupt, the video was held back until the right moment to politically assassinate him with the largest potential damage to his party. That moment was thought to be now.

But that Strache stepped down after the sudden media assault only makes him more convincing. The right-wing all over Europe will see him as a martyr who was politically assassinated because he worked for their cause. The issue will increase the right-wingers hate against the 'liberal' establishment. It will further motivate them: "They attack us because we are right and winning." The new far-right block Natteo Salvini will setup in the European Parliament will likely receive a record share of votes.

Establishment writers notoriously misinterpret the new right wing parties and their followers. This stand-offish sentence in the Spiegel story about Strache's party demonstrates the problem:

In the last election, the party drew significant support from the working class, in part because of his ability to simplify even the most complicated of issues and play the common man, even in his role as vice chancellor.

The implicit thesis, that the working class is too dumb to understand the "most complicated of issues", is not only incredibly snobbish but utterly false. The working class understands very well what the establishment parties have done to it and continue to do. The increasing vote share of the far-right is a direct consequence of the behavior of the neoliberal center and of the lack of real left alternatives.

Last week, before the Strache video appeared, Craig Murray put his finger on the wound:

The massive economic shock following the banking collapse of 2007–8 is the direct cause of the crisis of confidence which is affecting almost all the institutions of western representative democracy. The banking collapse was not a natural event, like a tsunami. It was a direct result of man-made systems and artifices which permitted wealth to be generated and hoarded primarily through multiple financial transactions rather than by the actual production and sale of concrete goods, and which then disproportionately funnelled wealth to those engaged in the mechanics of the transactions.
...
The rejection of the political class manifests itself in different ways and has been diverted down a number of entirely blind alleys giving unfulfilled promise of a fresh start – Brexit, Trump, Macron. As the vote share of the established political parties – and public engagement with established political institutions – falls everywhere, the chattering classes deride the political symptoms of status quo rejection by the people as "populism". It is not populism to make sophisticated arguments that undermine the received political wisdom and take on the entire weight of established media opinion.

If one wants to take down the far right one has to do so with arguments and good politics for the working class. Most people, especially working class people, have a strong sense for justice. The political assassination of Christian Strache is unjust. What was done during the 2007-8 banking crisis was utterly corrupt and also unjust. Instead of going to jail the bankers were rewarded with extreme amounts of money for their assault on the well being of the people. The public was then told that it must starve through austerity to make up for the loss of money.

While I consider myself to be a strong leftist who opposes the right wherever possible, I believe to understand why people vote for Strache's FBOe and similar parties. When one talks to these people issues of injustice and inequality always come up. The new 'populist' parties at least claim to fight against the injustice done to the common men. Unlike most of the establishment parties they seem to be still mostly clean and not yet corrupted.

In the early 1990s Strache actually flirted with violent fascists but he rejected their way. While he has far-right opinions, he and his like are no danger to our societies. If we can not accept that Strache and his followers have some legitimate causes, we will soon find us confronted with way more extreme people. The neoliberal establishment seems to do its best to achieve that.

Posted by b on May 19, 2019 at 01:10 PM | Permalink


james , May 19, 2019 1:40:31 PM | 1

b - thanks .. i agree "elaborate sting" and "the video was held back until the right moment"... clearly this was a set up.. strache says he is going to pursue this legally..

"working class people, have a strong sense for justice. The political assassination of Christian Strache is unjust." injustices are being done on a constant basis now and being justified by the msm regularly.. i think this is part of the reason people are seeking alternatives - whatever they might be... power to the people..screw the neoliberal agenda and blackmail artists that are so rampant at present...

Bratislav Metulski , May 19, 2019 1:40:51 PM | 2
Funny thing is e.g.- a German comedian Jan Böhmerman knew before. Already in April he said in a Video call live in Austian television duringthe TV-prize-giving of the trophy "Romy" that he couldn´t attend personally to receive the price because right know he was sitting together with some FPÖ-buddies in a Russian oligarch-villa on Ibiza, sniffing cocain, drinking and negotiating the takeover of the "Krone-Zeitung" (the biggest rag in Austira, smth like the "Bild" in Germany or "The sun" in Britain).

Böhmers management released a statement yesterday that Böhermann did know before but didn´t name the source he knew it from.
https://www.welt.de/politik/ausland/article193725535/FPOE-Vize-Strache-Was-Boehmermann-mit-dem-Video-zu-tun-hat.html

Cui bono?

Paul Damascene , May 19, 2019 1:43:18 PM | 3
Your article here raises a number of important issues. More or less at random:

* If I understand your characterization of your political leanings, based on this and on the perspectives MoA offers, I share many of your views. And whereas there may be a certain Schadenfreude at seeing a right-wing, B-team operator reveal himself, I agree that the forces behind the sting itself are of potentially far greater interest (and danger)..

* For every sting and smear such as this that we see, how many others take place sub rosa, corrupting our political and social landscapes, leaving no evidence that might trigger criticism or resistance?

* I'm not sure of how this plays out legally, but this seems not just to have been a sting, but entrapment, in which (if these were law enforcement agents) we could protest that the only illegal activity being proposed, was by those conducting the sting.

* If this was, as you suggest, authored by the BND, then this would be a clear instance of election "meddling" -- though not of the sort that our shining democracies are now being warned against. (At least President Putin will not be accused of conducting it, for once. That oligarch's daughter could have come from anywhere, but of course Russia.) Russia gets smeared is probably the larger aim, rather than this particularly Austrian politician.

hallelujah hinton , May 19, 2019 1:55:07 PM | 4
The "Russian" female is notably very attractive with a slender build. There is a honey-trap angle here as well. This would likely inspire the boasting (in order to impress her) on the part of the wingnut politician.
somebody , May 19, 2019 1:56:55 PM | 5
I think the word is protofascist. b. you have got a blind spot seeing geopolitics everywhere. Truth is most of this is simply a battle of billionaires. The key to understand the Ibiza video is the product placement. Everybody there drinks Red Bull plus alcohol (I am not sure about the alcohol the loss of control of the politicians who are present suggests cocaine).

The owner of Red Bull is an Austrian billionaire called Dietrich Mateschitz. Mateschitz is a right wing crank building a media empire in Austria including an "investigative platform" called addendum that is something like the Austrian version of Breitbart.

For some reason "addendum" began to shoot against Rene Benzko, an Austrian real estate billionaire, who intends to take over Kronenzeitung.

And guess what, Rene Benzko was mentioned in the video "as a friend", and a large part of the conversation centered on taking over Kronenzeitung something Rene Benzko is involved in.

Strache, Vice Chancellor of Austria, explained in the video for every Austrian to understand, that his party's scheme is based on accepting illegal contributions via a ngo, and lowering taxes in return. According to what he says in the video he also intends to charge for water by selling the right to the Latvian/Russien "niece of a Russian oligarch" or someone else prepared to pay to his party's ngo.

Anybody who is not a billionaire voting for FPÖ after this must be braindead.

Arioch , May 19, 2019 1:58:49 PM | 6
> with United Russia, the party of the Russian President Putin

Putin himself though stresses his non involvement in that party, he also tried to bootstrap organizations that could supplant or even challenge U.R. at least in some niches.

While U.R. probably is party of Russian ruling elites, it is hardly one-man-show of LDPR/Zhirinovsky kind and whether Putin is "gray cardinal" of U.R. is very questionable.

Sasha , May 19, 2019 2:05:52 PM | 7
It is said that children and drunk people always say the truth... Why is it not to be taken into account what he said once drunk enough?

For to be a strong leftist, b, you spend a great effort in discharging this man, while whitewashing the far-right saying they are no danger for our societies and assuring that they are clean, when that is a thing you do not know since they have not had yet the possibility to rule.

They are neither cleaner nor inocuous for our societies. For starters they have chosen as scapegoat the migrants when who is to blame for the wave of migration is the US, NATO and their imperial ambitions, so as to throw poor against poor and that way the elites could continue quietly looting us, while we fight each other. You will never heard anything agsint banks ans elites from anybody in the far-right.

FYI, it is not Matteo Salvini who is forming a coalition of the far-right to conflude to European elections, but it is Bannon from his HQ in a Cisterciense monastery in Italy who is commanding this operation. Salvini is really a piece, having supported Guiado and the Venezuelan coup intend, and said what he would do with the Yellow Vests , "I don't go to the Yellow Vests with Molotov cocktails, if anything, I put them in prison" ...

Then it is AfD, who goes also in the block, whose members have claimed the Germans should be proud of the performance of the German Army during both WW....

Then Vox, financed by MEK and Israeli lobby and promoted by Bannon and the WH, who only wear clear neoliberal economic policies in their, for the rest, confusing program.

The best to test what the far-right will do in Europe is taking a look at what is happening in Brazil during these last days, an attack on education and research as if it was a military target ...This, after the moving of the embassy to Jerusalem and wide support to coup d´etat in Venezuela...He is also widely supported and financed by the US and Zionists.

The far-right is the Troy Horse of transnational corporations and capital and already discredited neoliberal stablishment which comes now disguised under the softening label of "populists". Beware, there seems to be a coordinated effort at several blogs in the ten previous days of the European elections to whitewash the far-right.

Bratislav Metulski , May 19, 2019 2:20:38 PM | 8
@4 hallelujah hinton
https://www.heise.de/tp/features/Neuwahlen-Der-gefeierte-Stratege-Kurz-hatte-keine-Optionen-mehr-4425362.html
Telepolis one of the oldest and biggest non-commercial online news and discussion platforms in Germany states in the following article, commenting on his statement at his resignation declaration:

"Glaubt er, man wäre bei Alkohol nachsichtiger? Offenbar schien er sich betrunken kaum mehr im Griff zu haben - und dies ist wohlgemerkt seine Erklärung für die Äußerungen im Video. Erst gegen Ende beginnt er eigenes Fehlverhalten einzuräumen und bittet insbesondere seine Frau um Verzeihung, mit der er ein wenige Monate altes Kind hat. Kenner Straches ahnten an dieser Stelle bereits, dass dieser sich bereits für Dinge entschuldigt, die zu diesem Zeitpunkt der Öffentlichkeit noch gar nicht bekannt sind."

Does he (Strache) really assume he would get more indulgence by blaming it on the alcolhol? Obviously when being drunken he wasn´t in control of himself anymore - and this is actually his explanation for his statements in the video. Somehow at the end he finally begins admitting own misconduct and especially asks his wife for forgiveness, with which he has a few months old child. Experts on Strache suspected from this moment on, that he apologized for things which at this moment are not known to the public, yet"

So this very much hints something more. Right now there is a debate of cocain being visible on the table but this accusation points more towards schnickle with a babe imho. The babe to his right is not that ugly, admittely.

Jackrabbit , May 19, 2019 2:26:38 PM | 9
somebody @5:
battle of billionaires.... Anybody who is not a billionaire voting for FPÖ after this must be braindead.
Anyone who believes voting will change anything is braindead. Only supporting protest Movements (like Gillet Jeune) and free press/citizen journalism (Wikileaks/Assange) will have any real effect.
Zanon , May 19, 2019 2:30:32 PM | 0
Great piece - I dont see how Strache actually made anything wrong or atleast nothing not normal to politicians that constantly seek out support by big, powerful people. Most likely the deep state in Austria struck FPÖ just like FBI struck Trump.

As expected the hysteria of "russian" meddling have now publicized to weaken FPÖ in the EU election. Winners? NATO/US parties.

Arioch , May 19, 2019 2:36:33 PM | 1
@hallelujah hinton #4

Also notice how she pretended to be a niece.

Not some very close relative like daughter or sister, which may be fearsome, as "russian mafia" oligarch could be expected to "protect" her of ladykillers viciously. But also not some far relative who would be seen alien and have no financial support.

Just enough distance to be safe to hit on and try to share the oligarch's money. It was both honey&gold trap.

Sasha , May 19, 2019 2:38:57 PM | 2
Anyone who believes voting will change anything is braindead.

@Posted by: Jackrabbit | May 19, 2019 2:26:38 PM | 9

If voting would be such a waste, why would had taken so hard and long to achieve voting for minorities and women? Why the parties go to such efforts to campaign and disguise themselves as wolves with sheepskin like the far-right?

Why would certain forces need to go to such editorial coordinated efforts through their several blogs out there to give an impression of certain candidates which is opposite to what they really are? Wikilieaks/Assange are part of this efforts, btw

Clueless Joe , May 19, 2019 2:44:05 PM | 4
Metulski:

Seems indeed to be a honeypot aspect to the entrapment, and it's quite possible Strache stepped down at once to avoid that part to come to light, so that the public revelations would be limited to the economic shenanigans and influence-peddling level.

Also, this goes to show that the bulk of our Western politicians, across all the political spectrum, are a bunch of mediocre and quite corrupt fools. For him not to smell that this was a setup from the very first minute, it must be that such proposals are common place all across the board - which will only reinforce my suspicion that our societies, peoples and mankind as a whole would only benefit if we fully wiped out our economic, financial and political establishment and started from scratches.

Sasha , May 19, 2019 2:44:10 PM | 5
Spanish Colonel ( ret.) Pedro Baños, who was postulated for head of the CNI by the Socialist government of Pedro Sanchez, was object of slander campiagn as "pro-Russian" by the Spanish cluster of Integrity Initiative, only for declarations on the prejudice of sanctions for Spain, and nobody made such noise....
hallelujah hinton , May 19, 2019 3:03:31 PM | 6
Blackmail, smear campaigns, various traps via honey or corruption, hookers and blow, gay sex, paedofilia, or what-have-you, - all or in combination. Politicians are "all" compromised in these ways. Buck the system or threaten the status quo - whereby it gets somebody's serious attention and the shite hits the fan.

Enforcement and and penalties are selective. Selective enforcement. It's how "The Law" operates. Not defending the wingnut pig in the article. I appreciate Sasha's Trojan Horse allegory above.

the pair , May 19, 2019 3:16:52 PM | 7
wow...a bunch of elitist neoliberals with contempt for anyone lacking 10 zeroes on their paychecks and zero useful policies use "russian collusion" to entrap and embarrass a pseudo-right wing politician. who could ever imagine such a scenario? and why learn from the masses you represent when james o'keefe gives you all the inspiration you need?

but at least they blocked the ascension of someone who would trade political favors for money. that kind of nonsense simply won't do in western society.

karlof1 , May 19, 2019 3:24:47 PM | 8
Thanks for this explanation, b! I first saw this reported at Geroman's Twitter and used machine translation of the article he linked, but it lacked the context which you provided. This incident is subsumed within the larger conflict that's trying to keep EU from combining with BRI/EAEU, which means its roots/culprits are NATO/Outlaw US Empire--it points to desperation on their part.
Jackrabbit , May 19, 2019 3:25:34 PM | 9
the pair @17

Some will fail to see the sarcasm. Best to use the /sarc tag.

somebody , May 19, 2019 3:34:51 PM | 0
Posted by: hallelujah hinton | May 19, 2019 1:55:07 PM | 4

Sorry, you don't see the Latvian/Russian woman. You see Gudenus' wife who is from Serbia. Whatever the publishing papers got, it was a copy. More will come out.

Copeland , May 19, 2019 4:01:44 PM | 1
The savages in this neoliberal order use the secret services to subvert democracy. Deception and manipulation are the means used to corrupt the public domain. They would push the most pliable and ruthless leaders into office. Catastrophe and violence and disinformation are their most powerful weapons. But I still think that political processes and elections do matter; and what counts is a struggle to improve and reform the system of government. Doing our best to protect and maintain the integrity of electoral processes is something that requires both protests and political campaigns.
BM , May 19, 2019 4:14:36 PM | 2
So this very much hints something more. Right now there is a debate of cocain being visible on the table but this accusation points more towards schnickle with a babe imho. The babe to his right is not that ugly, admittely.
Posted by: Bratislav Metulski | May 19, 2019 2:20:38 PM | 8

The very strong implication certainly seems to be that there may be further video of Strache sleeping with the honey pot. He obviously knows what happened that night. If there were video cameras hidden everywhere, that was obviously one of the intentions behind the sting from the outset.

---

On the issue of "populism" and right-wing parties I confess I have a problem. I certainly want to see the Establishment thrashed, and especially in next week's EU elections, and there is no question that at the moment the right-wing parties have far more potential to upset the establishment than the left. If "Populist" parties are able to radically upset the EU Parliament, that should bring a much-needed hammer and axe to the anti-populist activities of the EU, and hopefully lead to the breakup of the EU.

On the other hand, unlike B, I do have extremely strong worries about the rising power of the far right and their connections to Nazis and neo-Nazis. I am concerned - even without the involvement of Bannon, but far more so with - that the rise of "populism" is a calculated policy of a Nazi segment of the Establishment that is designed specifically to usher in an international Nazi movement across Europe and Latin America under the leadership of and proxies of the - ever more and more Nazi behaving - US (which itself is in so many very real ways descended from Adolf Hitler's Nazi Party and the Japanese war criminals including Bush's family, tight connections with Nazi war criminals in the CIA, and historical leadership figures in the CIA). The large scale and extremely high level infiltration of hardcore Nazis in the German security services, Interior Ministry, Army, and CDU politics is a ticking timebomb waiting for its moment. There seems to be similar high level Nazi infiltration in many other countries.

We have to be careful what we wish for!

B, please do an article on the Nazi penetration of the German security services, Interior Ministry, Army, CDU etc, and links to the NSU affair, shredding of millions of documents by the Interior Ministry when demanded by the courts as evidence, links with the Board members and advisory board members of German big business especially Siemens and Deutche Bank and Bayer, etc.

Sasha , May 19, 2019 4:21:50 PM | 3
On how there is real danger with these wolves on sheepskin who only try to divide and conquer the working masses of the world, this old article by Ho Chi Minh on the importance of class conscience and the great labor of the University of the East in the former USSR to get workers of the world conscous and united in the common struggle. Also on the importance of having the right to vote:
Colonialism is a leech with two suckers, one of which sucks the metropolitan proletariat and the other that of the colonies. If we want to kill this monster, we must cut off both suckers at the same time. If only one is cut off, the other will continue to suck the blood of the proletariat, the animal will continue to live, and the cut–off sucker will grow again. The Russian Revolution has grasped this truth clearly. That is why it is not satisfied with making fine platonic speeches and drafting "humanitarian" resolutions in favor of oppressed peoples, but it teaches them to struggle; and helps them spiritually, as proclaimed by Lenin in his theses on the colonial question. To the Baku Congress, twenty–one Eastern nations sent delegates. Representatives of Western workers' parties also participated in the work of this congress. For the first time, the proletariat of the conquering Western States and that of the subject Eastern countries fraternally joined hands and deliberated in common on the best means to defeat their common enemy, imperialism .

Following this historic congress, despite internal and external difficulties, revolutionary Russia has never hesitated to come to the help of peoples awakened by its heroic and victorious revolution. One of its first important acts was the founding of the University of the East.(...)

The sixty–two nationalities represented at the University form a "Commune." Its chairman and functionaries are elected every three months by all the students.

A student delegate takes part in the economic and administrative management of the University. All must regularly and in turn work in the kitchen, the library, the club, etc. All "misdemeanors" and disputes are judged and settled by an elected tribunal in the presence of all comrades. Once a week, the "Commune" holds a meeting to discuss the international political and economic situation. From time to time, meetings and evening parties are organized where the amateur artists introduce the art and culture of their country.

The fact that the Communists not only treat the "inferior natives of the colonies" like brothers, but that they get them to participate in the political life of the country, is highly characteristic of the "barbarity" of the Bolsheviks. Treated in their native country as "submissive subjects" or "protéges," having no other right but that to pay taxes, the Eastern students, who are neither electors nor eligible for election in their own country, from whom the right to express their political opinion is withdrawn, in the Soviet Union take part in the election of the Soviets and have the right to send their representatives to the Soviets. Let our brothers of the colonies who vainly seek a change of nationality make a comparison between bourgeois democracy and proletarian democracy.

These students have suffered themselves and have witnessed the sufferings of others. All have lived under the yoke of "high civilization," all have been victims of exploitation and oppression by foreign capitalists . Moreover, they passionately long to acquire knowledge and to study. They are serious and full of enthusiasm. They are entirely different from the frequenters of the boulevards of the Latin Quarter, the Eastern students in Paris, Oxford, and Berlin. It can be said without exaggeration that under the roof of this University is the future of the colonial peoples.

The colonial countries of the Near and Far East, stretching from Syria to Korea, cover an extent of more than 15 million square kilometers and have more than 1,200 million inhabitants. All these immense countries are now under the yoke of capitalism and imperialism. Although their considerable numbers should be their strength, these submissive peoples have never yet made any serious attempts to free themselves from this yoke. Not yet having realized the value of international solidarity, they have not known how to unite for the struggle. Relationships between their countries are not yet established as they are among the peoples of Europe and America. They possess gigantic strength and do not yet realize it. The University of the East, assembling all the young, active, and intelligent leaders of the colonized countries, has fulfilled a great task, namely:

-It teaches to the future vanguard militants the principles of class struggle, confused in their minds by race conflicts and patriarchal customs.
-It establishes between the proletarian vanguard of the colonies a close contact with the Western proletariat, thus preparing the way for the close and effective cooperation which will alone ensure the final victory of the international working class.
-It teaches the colonized people, hitherto separated from one another, to know one another and to unite, by creating the bases of a future union of Eastern countries, one of the wings of the proletarian revolution.
-It sets the proletariat of colonialist countries and example of what they can and must do in favor of their oppressed brothers
.

This is why it is needed to throw the workers from the West against the migrants from the East and South, to avoid the invincible force they would constitute together. This dirty work is made by the far-right in the name of corporate liberal elites. They can play that they fight each other, but as soon as they get seats at the European Parliament, you will find the previous allegedly opponents all together aligned in the same Eurogroup. Time to time.

Bacchante , May 19, 2019 4:38:44 PM | 4
It is a wonder Strache's remark "Journalists are the biggest whores on the planet" and how he says he can subvert an entire media outlet to his political agenda by even firing the few remaining fringe elements. Yet here we can still talk about he was drunk, how his being set up was unjust, and how the poor guy will have to miss his lovers' right cause in Italy. Those vulgar masses are at it again! There can be no justification about the masses' support of far-right causes and the clowns like him. If you think otherwise it is the likes of moonofalabama next in line to be "fired", or eliminated. Legitimize their causes and it is Germany in 1920s all over again.

Two wrongs do not make a right, unfortunately.

Walter , May 19, 2019 4:56:04 PM | 5
"Left/right", I agree, is nearly without semantic value. Nevertheless class interests remain...how is it that this is so? Think about that, comrades.

And then consider wsws report about "At the annual meeting of the Bundeswehr reserve in autumn 2016, Veith announced: "I dream that in 2026 there will be a provincial regiment in each state with a charismatic commander, a troop flag and an organization of between 800 and 2,000 reservists to support the police and the Bundeswehr in emergency situations." " see> "German government prepares troops for domestic missions" @ wsws.org

Considering the overall aspects, it's rational to expect all parties in Europe to make plans, is it not? Of course the working class is not permitted to make such plans...is it?

Pnyx , May 19, 2019 5:04:18 PM | 6
I don't think Strache is as harmless as you portray him, B. You fall for his defence strategy if you attribute all his statements to the influence of alcohol. At that time, the man was very confident that he would soon be at the levers of power, which then materialized. It remains to be proven whether he did not put into practice anything of what he talked about at that house in Ibiza. After all, he was talking about the by far most influential newspaper in Austria.

Of course it is true that it is the neoliberal globalisers who have brought us to where we stand today. But that doesn' make people like Strache and Salvini any less dangerous. If they rise to total power, the result will be a naked dictatorship. Strache was beaten with his own weapons, you don't have to be under any illusions.

I agree with you that this is not the big setback for the right the mainstream parties dream of. But it won't help the fascists in spe in the future either.

Adrian E. , May 19, 2019 5:25:25 PM | 7
Who could have ordered such an elaborate sting operation?

A first association might be the dirty, deceptive campaigning SPÖ used against Sebastian Kurz (ÖVP) - the Silberstein affair -, but I think the methods that were chosen are too different to make a common source likely, Strache was targeted in a much more sophisticated way. The Silberstein affair may, however, be the reason why the tapes have partially been published now rather than before the last Austrian elections - at that time, dirty campaigning might have been discredited too much for the tape to have the desired effect,

The sophisticated operation using actors and a villa prepared with hidden cameras and microphones shows that this is hardly a normal case of dirty campaigning by political opponents. Most likely, either it was an action by a secret service or someone with deep pockets hired former secret agents.

If it was an action by secret services, the most plausible explanation seems to be that Western secret services targeted Strache because FPÖ is one of the parties who is in favor of restoring normal relations with Russia.

François Fillon comes to mind, a French conservative candidate who also had a quite a friendly attitude towards Russia - shortly before the elections, it was revealed (at least claimed) that Fillon had given his wife ficticious employment, and Fillon lost popularity, which helped Macron enormously.

Probably, some of the things Strache said during this sting operation were inacceptable, and Fillon may also not be innocent, but if there is a systematic selective targeting of European politicians who want to normalize relations with Russia by secret services, that would be a huge problem for democracy.

In the case of Strache and FPÖ, a different motive may also be plausible. There are connections between FPÖ and neonazis, and there are, in my view, legitimate concerns that Strache is too close to such far-right networks. I don't think it is good when right-wing populists whose rise is mainly due to the unpopularity of the neoliberal elites are equated with Nazis too quickly.

But in the case of FPÖ, this is less far-fetched than in the case of other European right-wing parties - historically, Nazis played an important role in FPÖ in post-war Austria, and it is one of the current right-wing parties that probably has more connections to the extreme right (e.g. via Burschenschaften) than others. I could imagine that someone might have ordered and financed the sting operation out of antifascist principles. While I may recognize the motivation as ethical and even partially agree with it, I don't think the right means were chosen, and such dirty methods can backfire.

Michael Droy , May 19, 2019 5:33:51 PM | 8
"While I consider myself to be a strong leftist who opposes the right wherever possible, I believe to understand why people vote for Strache's FBOe and similar parties"

Quite. It seems to me that only the Right and the Left have a clue right now, because they have an instinctive mistrust of what they are told in the media.
People like "b" and Craig Murray are to be thanked for explaining that to us middling voters.

You miss the most glaring "injustice". That which shows that GDP in most western countries had doubled in the last 30 odd years, that earnings for the top quartile have gone up by factors of 3 or 4. But that median earnings in US are unchanged, and in say UK are only up 10% or so (unless one is seeking to buy one's own house or flat).

All the improvements in inequality from 1930s to 1980s have been reversed in full. "Populists" (or better "anti-elitists") are driven mostly by sheer anger at how a small group had taken all the Economic gains of the last 35 years.

somebody , May 19, 2019 5:35:30 PM | 9
Posted by: Pnyx | May 19, 2019 5:04:18 PM | 26

I don't know what b. saw in the video what I saw was a discussion of an Orban like take over of Austria by FPÖ.

In other news people are arguing the following
- who will profit most - ÖVP
- why was the video not published after it was produced in 2017 - because ÖVP wanted a coalition with FPÖ
- why was it published now - ÖVP has been renting advertising space for weeks for an election in September (renting before the video came out), Sebastian Kurz will be the saviour who will get the disappointed FPÖ vote
add
- why the emphasis on Kronenzeitung,
who were the people producing the video
why Red Bull everywhere - Red Bull media empire billionaire Dietrich Mateschitz publicly announced that he would back Sebastian Kurz in 2017

ÖVP/Kurz/Mateschitz have moved so far to the right that there is not much space for FPÖ anyway. His problems will return when he needs another coalition.

brian , May 19, 2019 5:37:28 PM | 0
'The FPOe has good connections with United Russia, the party of the Russian President Putin, and to other right-wing parties in east Europe'

other?

Erelis , May 19, 2019 6:09:06 PM | 1
While the right wing parties in Europe don't have a problem with Putin, it does seem that much of the Western European establish has gone full McCarthyite hysterical where they see any contact for any reason with a Russian is automatically criminal. Aside from being a setup it relied the underlying false flag of presenting the woman as a Russian (and hence guility of some crime against the Austrians).

In fact, a suggestion for a column--personal impressions on whether everyday Europeans are falling for anti-Russian propaganda. Polls in the US indicate that Americans simply do not care (they could believe it, but not effecting their daily lives).

S , May 19, 2019 6:36:42 PM | 2
1. The ER (United Russia) party was founded by Sergey Shoygu, Yuriy Luzhkov, and Mintimer Shaymiev. Its chairman is Dmitriy Medvedev, not Vladimir Putin. Putin is not even a member of ER. Putin is the leader of ONF (All-Russia People's Front), which is a nation-wide discussion platform for politicians, professionals, and NGOs.

2. Russian billionaire Igor Makarov denies having a niece: "I was the only child in the family." ( Forbes.ru , in Russian).

3. In 2016, Joseph Mifsud invited George Papadopoulos to Rome and introduced him to "Putin's niece" with the intent of smearing Trump as "Russian puppet" and destroying his election chances. In 2017, someone (who?) invited Heinz-Christian Strache to Ibiza and introduced him to "Russian billionaire's niece" with the intent of smearing Strache as "Russian puppet" and destroying his party's election chances. Notice a pattern?

4. This is a clear case of Germany interfering in Austrian elections. Austria should deport 60 German diplomats, shut down German embassy in Vienna, and impose sanctions on Germany. Also put a German girl interested in Austrian politics in jail for 18 months.

Piotr Berman , May 19, 2019 6:37:32 PM | 3
Thinking about it, after revealing e-mail of HRC, Podesta etc. were published, their core supporters were enraged about the dirty trick and did not pay attention to the disclosed content, while for the core opponents of HRC she was already sufficiently vilified so the net change in voting intentions that can be attributed to that incident was modest.

Leaving aside the discussion of of various factors in that election, this public reaction is typical. Actually, in both cases the core supporters may be energized by the suspicion that this trick was performed by a foreign government. I do not think that there is a particular hostility toward Germany in Felix Austria, but the to the right wing Merkel government is like red cape for a bull. The women who unleashed a wave of refugees. On top of that, traditionally major parties of Austria gained reputation of dirty patronage, so the voters who care about that issue probably do not vote for them.

I do not expect Austrians to demand expulsions of German diplomats -- interference in our democracy -- or other sanctions, but nevertheless it stinks. Making sting operations on politicians has corrupt potential even if it is done by domestic law enforcement, but foreign intelligence services really do not have any excuse.

Thinking about it, the stings against George Papadopoulos described in his book were remarkably similar.

Piotr Berman , May 19, 2019 6:45:53 PM | 4
Great minds think alike, S!

That said, Austrians have a reputation of good manners etc., they will not unload their frustration on a girl. BTW, why there are suspicions of Germany being involved? Again, even extremist Austrians probably would like to have some proof before doing anything. I guess, America is indeed exceptional.

Uncoy , May 19, 2019 6:49:33 PM | 5
For all those of you whining about the corruption of Strache, this is how business and politics is done in Austria. Strache was just talking about the FPÖ's fair share after an election which they would win.

This all starts with Austrian's Presidential Election of 2016. The FPÖ won the presidential election a couple of years ago in May 2016. After the bell, postal votes overturned it! – postal votes more than 90% in favour of the establishment candidate Van der Bellen. Some constituencies full of Van der Bellen votes turned out to have 148% turn out. There was a court case by the FPÖ about procedure and hinting at ballot falsification. The case was judged by a (non-corrupt but under serious pressure) judge to have enough merit that the elections had to be annulled and the election rerun six months later . Austria went without a president at all for six months!

For six months the mainstream Austrian media campaigned non-stop against the FPÖ and Norbert Hofer. Huge efforts were made for voter turnout (it included huge bussing of potential anti-FPÖ constituencies and bribing pensioners to vote against the FPÖ via parties and cakes). With all of that, Van der Bellen scraped in on 4 December 2016, by 348,231 votes. Despite the non-stop anti-FPÖ propaganda and banging on drums, votes for Hofer's fell by less than 100,000 (95,993 votes to be exact). It's just that with six months to prepare the establishment had found enough "dead souls" to win the second round.

In the parliamentary elections of 15 October 2017, the FPÖ were set to win a strong majority in parliament. To defeat the FPÖ and Strache, the conservatives (Völkspartei) were forced to elect a male model non-university graduate 30 year old sex symbol with no work experience outside of politics as party leader. Of course Sebastian Kurz was mainly a figurehead for establishment figures in the venerable Völkspartei. Kurz does have a mind of his own though (I had the opportunity to interact with him personally at a local political discussion group in 2015) and it's hard to know exactly how much of his policy is dictated to him and how much is off his own bat.

Going back to Austrian corruption, there are enormous sums at stake. There is a long entrenched system of corruption in the establishment parties, the Völkspartei and the SPÖ. Strabag does win most of the government contracts. Favour is regularly granted on quid pro basis. The media landscape is very partisan and mostly for sale. Kurz's spiritual predecessor as a powerful head of the Völkspartei if not direct predecessor Wolfgang Schüssel was forced to retire from politics in 2011 due to never-ending corruption scandals. Schüssel's longstanding finance minister Karl-Heinz Grasser was caught carrying bags of cash to Lichtenstein and is still under investigation. If his mother-in-law were not the richest woman in Austria (Swarovski Crystal) and devoted to her daughter (Grasser's wife), he would long ago have been in jail.

Politically, Grasser knows where a lot of the bodies are buried from the Schlüssel political machine so either he has to be kept out of jail or he may take others down with him. In elite Austrian circles turning informant would be considered unsportsmanlike so there's an uneasy truce still fought to this day in the courts where Grasser is kept out of jail via procedural methods (detect a pattern) and Grasser doesn't rat out the others.

Strache's sin is not planning to use the advantages which accrue to the governing Austrian party but getting caught out talking about it. Strache is something of a lout, not terribly loyal (he was the Brutus who threw Jörg Haider under the bus in 2005 in a palace putsch). He's a smoker in power who used his power to overturn some very positive anti-smoking laws. But he's less corrupt than any of his equivalents in the Völkspartei and is only a nose ahead of the his equivalents in the SPÖ. His politics and policies of Austria for Austrians are pretty simple. Hence people vote for these policies.

Here's a sample of the SPÖ's wares in the 2010 Vienna elections:

The FPÖ has historically been weakest in Vienna but in 2010 they took 27% of the vote in this SPÖ stronghold, their first step in what has been a steady march to power.

Anyone who does not directly have his or her family's nose in the EU trough at this point knows that the policies espoused by transatlantic puppets like Angela Merkel and Emmanuel Macron push our countries and our continent towards self-destruction. Life in Europe, post-1968 and pre-2013, has been pretty damn good. There's absolutely no good reason for us to rip up our traditions or turn into a continent of immigrants and mobile job seekers. We instinctively abhor what is happening to our nations. By nature Strache is inclined this way himself (he's no great thinker) and has the good sense to ride the wave.

somebody , May 19, 2019 7:11:44 PM | 6
Posted by: Piotr Berman | May 19, 2019 6:45:53 PM | 34

As Strache explains in the video, Austrian dirty tricks are done "via another country".

somebody , May 19, 2019 7:21:16 PM | 7
For all those of you whining about the corruption of Strache, this is how business and politics is done in Austria. Strache was just talking about the FPÖ's fair share after an election which they would win.

So why did he step down?

Here's a sample of the SPÖ's wares in the 2010 Vienna elections:

You mean FPÖ wares .

Hoarsewhisperer , May 19, 2019 7:29:57 PM | 8
...
"This stand-offish sentence in the Spiegel story about Strache's party demonstrates the problem:"

In the last election, the party drew significant support from the working class, in part because of his ability to simplify even the most complicated of issues and play the common man, even in his role as vice chancellor.

"The implicit thesis, that the working class is too dumb to understand the "most complicated of issues", is not only incredibly snobbish but utterly false..."

I can't agree that Spiegel's attitude to Strache's party is condescending toward the working class. Right-wing parties tend to spout a lot of aggressively authoritarian spin tank bullshit to encourage voters to tune out when a R-w politician is telling them what to think. If Strache is adept at separating fact from fiction and superfluous verbiage, then people would appreciate his candor.

In a Democracy, and in theory at least, politicians are supposed to represent and defend the views of the people who voted for them, not vested intere$t$. Or so we've been led to believe...

I'll always remember Spiegel as the folks whose photo-journalists torpedoed Crooked Hillary's feeble-minded Cheonan (NK-SK) bullshit. That story vanished overnight. It's not even referred to in NK smear campaigns. Dead & buried.

somebody , May 19, 2019 8:15:54 PM | 9
Posted by: Hoarsewhisperer | May 19, 2019 7:29:57 PM | 38

In a Democracy, and in theory at least, politicians are supposed to represent and defend the views of the people who voted for them, not vested intere$t$. Or so we've been led to believe...

You are making this theory up.

Let's take the American constitution .

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,

That's it.

The German constitution is absolutely clear that members of parliament represent all of the people (ie different views and interests) and are bound by their own judgement and conscience only.

As we are discussing Austria, lets see what the Austrian constitution says. Austria has "linguistic and cultural diversity" and the protection of its grown native peoples in its constitution, this means Slovenian, Croatian, Czech, Slovakian, Roma and Hungarian. So the Austrian constitution has a concept of a multinational state where different peoples grow and are protected even if the Viennese "Stammtisch" does not like them.

There is no "democratic theory" that suggests representatives should follow the uninformed and prejudiced views of their electorate against their better judgement.

Strache seems to have specialized in "fake news" - ie mostly invented stuff claiming Muslims, immigrants or whoever were treated in a better way than native Austrians or threatened native Austrians.

It is a very convenient technique when you plan to cut social services, you have someone to blame.

Piotr Berman , May 19, 2019 9:05:45 PM | 0
To those who fill that politics of Strache are obnoxious and that justifies entrapment, remembers that methods of that type are not improvised, and that means that there is an apparatus that does it. We noted similarities with provocations against George Papadopoulos. In the latter case the target was cautious, after all, we had to be well aware of such methods. But anyone who is despised by NATO establishment are similar group can be on the receiving end, think about Assange.

[May 20, 2019] Rapid DNA-Testing Reveals Third Of Migrants Lying About Family Relationship To Children

May 19, 2019 | www.zerohedge.com

Rapid DNA testing has revealed that almost 1/3 of illegal migrants apprehended at the southern US border were not biologically related to the children they were traveling with, nor were they cases of step-fathers or adoptive parents, according to the Washington Examiner .

The findings were a result of a pilot program conducted by Immigrations and Customs Enforcement (ICE) in El Paso and McAllen, Texas.

The number of migrants tested and how they flagged people for testing is unknown, while the official added that some migrants refused the cheek-swab test and admitted that they aren't related to the children they were with after learning that their claim would be subject to DNA proof.

Border Patrol agents are seen processing a family unit in Texas earlier this month.

After analyzing the results of the pilot, the Department of Homeland Security will consider rolling out the rapid DNA tests on a broad-scale, according to ICE.

"This is certainly not the panacea. It's one measure," said the official.

One upside, the source said, was that in addition to verifying bogus relationships, it also verified many when Homeland Security personnel were unsure.

The Examiner reported in March the Department of Homeland Security and ICE were looking at adopting the test, made by a company called ANDE . On May 1, DHS announced it would launch a pilot of the program in instances where ICE Homeland Security Investigations agents could not verify a family unit's relationships. - Washington Examiner

In March, former DHS chief Kristjen Nielsen announced that border crossers have been using " child recycling rings " to trick US authorities .

"We've broken up child recycling rings -- if you can believe it -- in the last couple of months, which is where smugglers pick up a child, they give it to adults to present themselves as a family once they get over -- because, as you know, we can only hold families for 20 days -- they send the child back and bring the child back with another family. Another fake family," Nielsen told Fox News 's Tucker Carlson.

https://www.youtube.com/embed/rEfma2hj2sU?start=232

Tags Social Issues

[May 20, 2019] Chinese concept of Face and the current trade dispute by walrus.

Right now Trump administration clearly wants to slow down China development and Chinese leadership understand that. The game is probably similar to the game the USA played with the USSR -- create economic difficulties to the point when disintegration, or the social upheaval is possible. China level of internal debt denominated in dollars probably dwarf their Treasury holdings (this also is true for Russia). This situation is considered by many commenters a huge weak point and that might be Trump team calculation: in their current situation Chinese's can't afford to lose such a large export market as the USA: many enterprises will simply be bankrupt.
The US consumers might still feel the pinch, but ultimately Beijing needs the trade surplus more than the USA needs their trade.
If this is wrong, Trump administration might make already bad situation worse, as if China can switch goods flows and survive more of less intact that might undermine dollar as the reserve currency. They also now will probably completely ignore sanctions against Iran, making them non-essential: a kick in the chin to the Trump and neocons who surround him in WH.
Looks like we are on the wedge of creation of two hostile to each other neoliberal systems instead of one: one with the center in Washington and the second with the center in Peking.
It is bad strategy to attack several countries simultaneously (the war on two forints) and that's what Trump is doing: Iran, Russia and China are three major battlefields now. There are also some tensions with EU too.
The concept of face while somewhat interesting is probably exaggerated and is redundant here. This comments really gats to the bottom of it: " It has always seemed to me that "Face" is the distant inferior cousin of Honor and a much closer sibling to Pride or even Hubris. That is, the Asian concept of Face has everything to do with how you are perceived and almost none with how you "are". Honor, meanwhile, demands a rigorous adherence to a code of conduct and force of will that places less emphasis on perception and more on "being". Westerners (myself included) tend to get those two confused. "
Notable quotes:
"... 6: It goes a pretty long way to be aware of some more imaginative things that especially state aligned business can do if you are in China. Things like precision weighing any electronic equipment you take there before and after are just best practice. ..."
May 20, 2019 | turcopolier.typepad.com
I don't think the Washington decision makers, as opposed to perhaps career Sinologists in the State Department, quite understand the dynamics of the Trump Administrations relationship with China and the risks America appears to be running. The bit that seems to be missing is a realistic appreciation of "Face".

A quick search of the internet reveals scholarly definitions of "Face" together with the description of it in socio - cultural terms that in my opinion do not do it justice. Couple that with Western insensitivity, NeoCon hubris and Trumps preference for believing everything is a negotiable transaction and we are set up for a monumental falling out with China that has lethal consequences for America.

I will give a few examples of Face, you can find plenty more on your own. Did you know it is an insult to request a Chinese to sign a written contract? If he has agreed to the terms and said as much in front of other Chinese then that is enough. "Face" does the rest. Did you know that in certain circumstances "Face" requires you to lie to, or ignore, authorities in support of family and friends? This last, in my opinion, is the reason for the current Chinese attempt at omnipresent surveillance; "we tremble at the power of the Emperor in Peking, but the mountains are high".

Col. Lang makes the point that the Japanese went to war to dispel the threatened perception that "they weren't the men they thought they were". Well with "Face' in China its more than that, you are your "Face". To damage someones "Face" is to create a lifelong mortal, implacable enemy. There is no way, short of death, to recover once you have given offense. Against that standard Trump, Bolton and Pompeo are playing with fire. "Just kidding" doesn't cut it.

It may surprise some of you to know that the West was trading with China right through the cold war - in US dollars only. Nixon didn't discover China either. It also may surprise some that China is perfectly capable of making very high quality reasonably priced sophisticated goods, and always has been. The reason that Walmart sells cheap Chinese schlock is because that's what they asked China to supply. As for "stealing intellectual property", don't make me laugh. We all do it and China has plenty of very smart people that create first rate IP of their own. I make the case that China is a sophisticated and capable economy, with its own amour propre, not some third world hole populated by leaders that can be bought or threatened, and Trump risks forgetting this at our peril.

To this end I note that the trade war is not going to Americas advantage, China has vast holdings of American debt, China buys Iranian oil, judging by reports of Sochi discussions, Russia AND China are likely to support Iran and both Korea and Taiwan are vulnerable. In my opinion President Trump has a very small window left in which to fire Bolton and perhaps Pompeo and embark on a more conciliatory line, before China becomes an irreversible, implacable enemy.

What says the Committee?


Procopius said in reply to Harlan Easley ... , 18 May 2019 at 10:43 AM

So unless we economically surrender to them expect war?
See, that's the attitude Trump and the Trade Representative display. It is impossible we could find a compromise that would be better for both sides. It is a purely binary zero-sum game. If we do not "win," then we "lose," which means surrendering to an implacable enemy who will destroy us. It's no wonder the majority of the world's people think America is the greatest danger to world peace. This is why Bolton is able to find support throughout the nomenklatura. Most Chinese still hold to Confucian concepts of honor, something the American elites abandoned decades ago as unprofitable.
jdledell , 18 May 2019 at 10:43 AM
My son, Jason, is fluent in both Mandarin and Cantonese was headquarered in Hong Kong for years but now works out of Tokyo but spends a great deal of time in China conducting business. He would probably argue that, if anything, Walrus is understating the importance of Face in China. There are numerous rituals associated with interacting with Chinese that must be observed in order for communication and agreement to flow properly.

I think many in America, maybe even Trump, have an image of China as a backward country full of uneducated dumb people. Nothing could be further from the truth as a large segment of the population is not only eductated but intellectually the equal of Americans.

As far as handling the trade war between China and the U.S., I think in some ways China has an advantage in it's government directed relationship with business. It allows China to react quickly to adverse conditions, faster and with more cohesiveness than our capitalist system. Watch for China to move it's manufactured products through numerous other countries to avoid some of the impact of tariffs.

China is also not as responsive to consumer complaints as the U.S. democracy. As soon as Trump's base starts complaining about the higher prices at Walmart etc. Congress and Trump's re-election campaign officials will start to make China tariffs seem intolerable.

EEngineer , 18 May 2019 at 10:43 AM
I would think the Chinese see Trump as something to be persevered for a few years regardless of who he surrounds himself with at this point. I wonder if they have a term for "face incapable" as a parallel concept to the Russian "agreement incapable"? As such they probably see his administration as a no more sophisticated than a hornets nest, to be avoided if possible and swatted if necessary.
ponderer , 16 May 2019 at 11:29 AM
It has always seemed to me that "Face" is the distant inferior cousin of Honor and a much closer sibling to Pride or even Hubris. That is, the Asian concept of Face has everything to do with how you are perceived and almost none with how you "are". Honor, meanwhile, demands a rigorous adherence to a code of conduct and force of will that places less emphasis on perception and more on "being". Westerners (myself included) tend to get those two confused.

If the Chinese were bound by the authors concept of Face, China must be a paradise without corruption. Instead of polluted water land and air, wizened elders concerned over their stewardship and the lose of face from an environmental catastrophe, would provide a harmonious balance between man and nature. Instead, its a paradise and a ghetto where passerby's walk nonchalantly around the dieing. Where companies reluctantly provide netting to slow the steady suicide of their workers. They do tend to plan for the long term, and they can certainly hold a grudge I would agree. How far are you willing to bend-knee for someone else's concept of pride though? Tariffs, which have been around since antiquity, seem like a small infraction for all this talk of life-long mortal, implacable enemies. Yesterday I saw a Chinese TV program that roughly translated said Donald Trump was literally in the White House crying over soybean prices. POTUS literally crying over the Chinese governments response to our rising tariffs after decades of unfair trade practices that benefited the Chinese (elites anyway). So you shouldn't think that saving Face is a two way street or will result in a mutually beneficial deal.

walrus -> ponderer... , 16 May 2019 at 06:13 PM
Face has nothing to do with Judeo Christian ethics. Corruption and pollution can earn you a bullet behind the ear in China.

The issue with Face is that duties don't extend much outside the family. That's why they can sell poisoned baby formula, etc.etc.

It also explains why the CCP is afraid of losing China's Face. They will be blamed.

blue peacock , 16 May 2019 at 06:13 PM
Walrus,

IMO, China has been "an irreversible, implacable enemy" for decades now. It just so happens that our own fifth column in the Party of Davos have aided and abetted this implacable enemy while making sure that we voluntarily disarmed and did not fight back a war that they are fully engaged in. The consequence has been that we are paying for our own destruction. China is more authoritarian & militaristic today than it was three decades ago and there are several people who believe they currently pose an existential threat to the US & the West in general.

https://www.washingtonpost.com/opinions/steve-bannon-were-in-an-economic-war-with-china-its-futile-to-compromise/2019/05/06/0055af36-7014-11e9-9eb4-0828f5389013_story.html

While tariffs may not be the best strategy, we have to admire Trump's courage and determination to finally fight back in the face of massive internal opposition from our fifth column. When you look at the sheer scale at which the Chinese are buying think-tanks, academics, media, K-Street lobbyists & political influence it is staggering and only the Israeli influence operation is bigger in depth & breadth. Ever since Bill Clinton gave China Most Favored Nation status and the Party of Davos furthering their own narrow short-term financial interests, we have directly financed and transferred technology to China and dismantled our industrial base. China joined the WTO but has thumbed their noses at every adverse WTO ruling that showed they play not by the rules but are predatory.

You dismiss the scale of IP theft, forced technology transfer, product dumping, state subsidies and industrial espionage as everyone does it. That's typical of the China apologists in the West.

I think you over-estimate China's financial strength. There are several macro analysts with excellent long-term analytical track records who believe that China is desperately short USD. This theme that you note that China can crash the UST market is already proven to be false. China in fact sold hundreds of billions of UST in 2014-2016 with no perturbation in the UST market.

https://www.bloomberg.com/news/articles/2016-06-15/china-dumping-more-than-treasuries-as-u-s-stocks-join-fire-sale

On the contrary the financial pressure on China is increasing as their debt-fueled malinvestments grow. I'm willing to bet you that we'll see this pressure manifest in a devaluation of the RMB.

https://www.valuewalk.com/2019/02/kyle-bass-china-paper-tiger/

I will leave you with a speech from your fellow countryman, John Garnaut. Chilling!!

https://sinocism.com/p/engineers-of-the-soul-ideology-in

walrus -> blue peacock... , 16 May 2019 at 06:16 PM
So the Chinese are playing us at our own game and winning? Boo Hoo. Throwing over the chess pieces is not a useful response.
blue peacock said in reply to walrus ... , 18 May 2019 at 02:36 AM
Sure, they've kicked our ass these past couple decades. Now they've got cocky and think they own us. Supply chains can re-orient.

As a red-blooded American I'd like my home team to seriously up their game and of course beat the Chinese at their own mercantilist game. A good start would be to put the squeeze on their massive USD short position. Eurodollar market is a perfect spot to begin. The Chinese have US$1.3 trillion debt maturing in 12 months. They've either got to redeem or rollover. Devalue & bleed reserves. Or else sell USD assets & lose collateral. Margin call time! Wake-up call time for BRI - if Trump chooses to squeeze at this immediate vulnerability. Trump can also take the next critical step - restrict their access to our capital markets. The SEC can also come down hard on all their fraudulent listings.

Maybe Australia is losing its best & brightest moving to China. Not here. In fact it is the opposite. Young Chinese techies whoever can get a visa are immigrating here. Wealthy Chinese including top CCP officials are using every mechanism that they can avail to get their capital out. Chinese capital controls are tightening. If they had an open capital account their trillion dollar reserve would vanish overnight as capital flees. You must know that China's domestic security budget is larger than their defense budget. The CCP fear their own people more than anyone else. Why do you think they're amping up their domestic surveillance expenditure?

I can also give you an anecdotal experience. Newly minted billionaire and founder of Zoom, Eric Yuan spoke to our tech analyst team a year ago. I happened to be in that meeting. He was categorical that if he had been in China and had half the success, CCP would effectively control his company. He said every Chinese techie dreams of moving to America.

https://www.cnbc.com/2019/04/18/zoom-ipo-bill-gates-speech-inspired-founder-to-move-to-us.html

Jack Ma, was banded out here in the west as the new breed Chinese tech entrepreneur. A billionaire on the Davos circuit. Did he really own Alibaba or was it the CCP? How come his shareholding was suddenly zeroed out?

https://www.scmp.com/tech/enterprises/article/2167002/alibabas-jack-ma-giving-ownership-chinese-entities-heres-what-means

Do you think any smart Chinese really trusts the CCP? Why would they? You talk about "face" & culture and the 3,000 year history of the Han people. What about the history & culture of the Tibetans? Or the culture & traditions of the Uyghurs with over 2 million of them currently undergoing brutal "re-education" in concentration camps in Xinjiang?

The authoritarian CCP have had a free ride on us for over two decades. It is time to suit up and give them a little taste of their own medicine. I hope Trump retains his resolve.

Harlan Easley , 16 May 2019 at 11:46 AM
I don't care one iota about their "Face". Not at the expense of deindustrializing large sections of the American Heartland. Which has already happened. Our trade relationship with China has been a disaster. The only people to benefit are large shareholders.

As for them holding our debt it's threat is non-existent. Let them sell all of the bonds. China currently owns $1.13 trillion in Treasurys, a fraction of the total $22 trillion in U.S. debt. The Federal Reserve if need be can buy them all up but even that won't be necessary due to insatiable demand for the bonds even at these ridiculous low interest rates.

In fact their obsession with "Face" indicates a psychopath. Defines as no sense of right and wrong and is generally bolder, more manipulative, and more self-centered than a sociopath. That sums up their dealings with us the last 25 years.

Only a fool continues to play this game of theirs. Stealing our technology at will, forced 50/50 partnerships, currency manipulation, dumping into our country to destroy industries, etc. etc. etc.

Plus they are expanding geographically now due to us making them rich. They are 1.3 million homogeneous Han for the most part. Especially compared to our country. I have to say their government has definitely improved the lives of their citizens as a whole and I respect that. But enough of our weak kneed leaders giving away the store.

I personally am being hurt by the tariffs due to many LVP flooring products I sell are sourced from China. I have no problem taking a hit for the greater good and have been working on sourcing from different locations.

ISL said in reply to Harlan Easley ... , 16 May 2019 at 11:19 PM
Harlan Easley,

Thanks for pointing the finger at China -looking out for their own interests - the bloody bas-ards.

I guess you believe that had China had remained insular, the US would not have de-industrialized to a different country? As if NAFTA wasn't a great sucking sound. Hmm. Me things the problem lies closer to home - but no finger pointing there.

Totally impressed with the TrumpTareef - Totally on top of everything.

Oh wait, the tax advantages that encourage de-industrialization remain. But I guess Trump doesn't understand taxes and how wealthy corporations and people use them to move production overseas and not pay taxes ....

Meanwhile, global de-dolarization accelerates. At some % the US loses its special status and there will be a reckoning.

I see a lot of hot air - not new policy: Manufacturing did not come back, US infrastructure is a joke and continues to crumble, workforce participation continues dropping, and hourly median wage remain stagnant. Why? Because it requires actual policies that lessen the profitability of some (very wealthy friends in the circle Trump wants to run).

Here's my prediction - Trump will fold by summer or sooner.

guidoamm said in reply to Harlan Easley ... , 18 May 2019 at 04:38 AM
Apologies for butting-in in an otherwise fascinating conversation... but....

There is considerable but misplaced talk of "capitalism" being thrown about in some threads, whilst Harlan worries about the deindustrialization of the West, ostensibly, due to China. China has little to do with deindustrialization. A centralized monetary system coupled with electoral politics, can only be sustained through the use of perpetual fiscal deficits.

In order for the political construct to be able to run perpetual fiscal deficits, national debt must necessarily expand. As debt conforms to the law of diminishing marginal utility however, this is a compounding strategy.

Thus, in order to compensate for the loss of purchasing power, government borrowing must progressively increase till eventually it goes parabolic. Hence the reason debt in the USA doubled between 2008 and 2016. This is the parabolic phase.

In order to sustain this strategy, fiscal revenue must ideally expand. In order to increase fiscal revenue however, legislation must be brought to bear. As legislation and fiscality become progressively more restrictive in one country, economic actors migrate to countries where they can achieve an economic advantage.

As a corollary, as legislation and fiscality become progressively more restrictive, barriers are raised in business and industry. As barriers rise, so does unemployment and/or under employment whilst business dynamism is proportionally stifled.

In this context therefore, artificially lowering interest rates to ostensibly kick start the economy, actually reinforces the offshoring dynamic to the detriment of SMEs and the benefit of large corporations.

If China can be blamed for anything therefore, it can only be blamed to have opened the doors wide open to Western corporations to allow them to shift their production technology out of Europe and the USA.

All the while, the finance industry is laughing all the way to the bank.... their own bank that is.. ..

g

Robert L Groves , 16 May 2019 at 01:14 PM
Excellent analysis by Chas Freeman on US/China relations.
https://chasfreeman.net/on-hostile-coexistence-with-china/
robt willmann said in reply to Robert L Groves... , 17 May 2019 at 12:05 PM
Robert Groves,

Chas Freeman was president Richard Nixon's senior interpreter for Nixon's visit to China. Here is an interesting description by Freeman of some of that trip--

https://adst.org/2013/05/the-interpreter-who-said-to-no-to-president-nixon/

Dave Schuler , 16 May 2019 at 01:31 PM
Something to which not enough consideration is given is that China has a considerable volume of foreign loans, those are increasing, they are denominated in dollars (particularly since the yuan is not convertible), and must be serviced in dollars. That means that China needs a lot of dollars which it obtains via selling goods to the United States.

Said another way, China cannot reduce the amount it sells to the U. S. or buy more from the U. S. without a convertible currency or reducing its level of foreign debt.

Jack said in reply to Dave Schuler ... , 16 May 2019 at 04:28 PM
Kyle Bass on why China has to sell its US Treasury holdings. Twin deficits.

https://twitter.com/Jkylebass/status/1129022386228146176

MP98 , 16 May 2019 at 02:23 PM
"Did you know it is an insult to request a Chinese to sign a written contract?"

So, assume that they are dishonest negotiators, as they just showed by walking away from 6 months of negotiations that they "agreed to?"

Stueeeee , 16 May 2019 at 02:58 PM
Your commentary exudes the naivety that the Chinese have preyed on for the past 50 years. Their meekish and subservient mannerisms hide a ruthless and immoral inner nature. They would still be a backward country if not for our elite's insatiable greed. What have they produced organically that wasn't ripped off from developed countries? What do they offer cultural other than a social credit system with improved state surveillance techniques? They treat their own people like dogs and they still have dog eating festivals. China offers a way of life that is an antithesis of the West, so it is inevitable that there will be a clash. The question isn't if but when. The longer we delude ourselves into thinking that economics will change China, the more blood will be shed when the reckoning occurs.
walrus -> Stueeeee... , 16 May 2019 at 06:22 PM
Denial is not a strategy. For the record, I don't like eating dogs either. but i'm willing to make an exception for pit bulls.
VietnamVet , 16 May 2019 at 03:33 PM
Chinese chauvinism puts American exceptionalism to shame. They've been the Celestial Empire thousands of years longer than the upstart Anglo-American Empire. In last 30 years the Western Elite dumped "noblesse oblige" for "get it while you can". China's entry into the WTO directly hallowed out manufacturing in the Mid-West ultimately resulting to Donald Trump's trade war.

This was a result of CEOs and Wall Street Raiders moving manufacturing to low wage, no environmental regulation, nations to make a quick buck. China was a willing partner in the con in order to modernize.

China's retail sales are now greater than America's. Since the US declared an economic war, GM will have to drop Buick and Cadillac brands and market their cars in China as Chinese. But "Face" likely will make that ploy unsuccessful.

Fred -> VietnamVet... , 16 May 2019 at 10:34 PM
VV,

" GM will have to drop Buick and Cadillac brands and market their cars in China as Chinese."

You seem to be misinformed. China has required building those vehicle lines in China for some time now. GM moved all that production there with the intent of exporting from China to other markets in addition to what small portion of the Chinese car market they already have.
https://www.forbes.com/sites/michaeldunne/2017/05/31/china-ramps-up-exports-via-volvo-buick-cadillac-and-now-bmw/#59830405459e
https://www.cnbc.com/2018/09/06/cars-made-in-china-at-risk-of-being-pulled-from-us-market-in-trade-war.html

Joanna said in reply to Fred ... , 17 May 2019 at 06:09 AM
Look Fred, I agree VV seems a bit confused where to side on the issue or whom to blame beyond Wall Street. Thus good you put him on the right track.

But China required or GM management found it convenient considering production conditions?

VietnamVet said in reply to Fred ... , 17 May 2019 at 08:45 PM
Fred,

GM sold over 4 million vehicles in China last year, even more than it sold in the North American market. The U.S. only exported 267,000 passenger vehicles to China. Apple sales declined 30% in China. In an economic war Chinese will avoid buying American branded products. They have alternatives. Americans don't have a choice at Walmart except to pay the higher prices due to the tariffs.

Fred -> VietnamVet... , 18 May 2019 at 09:28 AM
VV,

Those GM vehicles were built in China by a JV with majority Chinese ownership. The product line sold at Wal-Mart has plenty of things made in countries other than China. We have a twenty trillion dollar economy with Chinese imports making up 500 billion. We've got plenty of options.

Jack , 16 May 2019 at 04:01 PM
China has been emboldened as the west moved their manufacturing base there and transferred their technology. They've been taking the next steps directly influencing our politics.

https://www.nzherald.co.nz/nz/news/article.cfm

Huawei while it claims it is an employee owned company is controlled by the CCP as many "private" companies in China. The west would be foolish to not put an end to Chinese subterfuge that undermines their economy and national security.

https://uk.mobile.reuters.com/article/amp/idUKKCN1SM0VC

catherine , 16 May 2019 at 04:25 PM
I say if Face is important, respect their Face. After all written agreements are broken all the time so what difference does it really make.
Ryan , 16 May 2019 at 04:39 PM
I don't buy it at all. As others have pointed out China requires access to American markets to 1) make their dollar denominated loan payments and 2) keep foreign manufacturing located in the country. The cost of tariffs to the United States is finding alternative sources in supply chains and higher end cost to consumers. We're insanely rich, we can afford that without issue. The cost of tariffs to China, in the ultimate analysis, is foreign companies moving their manufacturing out of the country, which would utterly devastate them.

So far as I understand the Trump administration is demanding nothing more than China play by the rules of the game as written. If they're not willing to do so, **** 'em.

walrus -> Ryan... , 16 May 2019 at 07:10 PM
What rules? Who wrote them? Respect? Ask Iran. Poppycock.
Joanna said in reply to Ryan... , 17 May 2019 at 08:11 AM
We're insanely rich, we can afford that without issue

That's a curious statement. You too? Insanely, that is.

turcopolier , 16 May 2019 at 05:23 PM
Catherine

A well written contract contains enforceable penalties for non-performance with the money often held in escrow. That's the way I write them. Trump is using the balance of US/China trade to penalize the Chinese for reneging on the verbal and draft agreements they made with us.

catherine said in reply to turcopolier ... , 16 May 2019 at 09:45 PM
True. I am not familiar with the agreements so can't discuss it intelligently.
Just saying it seems hardly anyone lives up to agreements any more regardless of in writing or not.
And dealing with countries is dealing with the people who represent it ..I do believe you catch more flies with honey than vinegar. You can always swat them later if honey doesn't do the trick.
fredw , 16 May 2019 at 06:14 PM
This is a traditional problem deeply embedded in Chinese culture. Westerners in the 1800s concluded that it was impossible to write a binding contract in classical Chinese. There were hopes for Mandarin, but... I was reading about this as a college student studying Chinese in the 1970s and have never ceased running across complaints about it. Chinese contracts are only as good as the will of the contractors and the influence you can bring to bear. When you are dealing with government, a contract is good until the officials get replaced with new faces. Even big players like McDonald's are not exempt.

"...what was meant as the flagship of McDonald's planned expansion into the People's Republic of China (it already had outlets in Hong Kong and Taiwan) was destined for controversy. In 1994 -- only two years after opening -- a legal battle pitted the transnational corporation against Beijing's government in a land dispute symptomatic of China's no holds barred modernization.

"In question was McDonald's 20-year lease on the strategically located property at Wangfujing -- a busy central shopping district -- and the city's attempts to shutter the restaurant to make way for a new super sized shopping mall. McDonald's balked at the eminent domain order, which flattened the surrounding neighborhood. In the end the burger joint was the lone building standing amid acres of rubble. The dispute raised serious concerns among foreign investors over the efficacy of business contracts in China at a time when the Communist state was seen as the future of global markets.

"But in late 1996 McDonald's China president Marvin Whaley announced a reconciliation. "In a spirit of teamwork and partnership, we've developed a plan that will allow our strong expansion in the city to continue."

Note that it took two years for the "spirit of teamwork and cooperation' to kick in for a multi-billion dollar cooperation who could presumably have just been given another good spot for a hamburger stand. If the officials involved had been willing. Your mileage may vary, but you are unlikely to do better.

https://timeline.com/china-mcdonalds-food-history-95cd7e2d1fb9

walrus -> fredw... , 16 May 2019 at 07:07 PM
Thank you Fredw for an excellent example of how McDonalds came to grips with Face, to everyone's benefit.
walrus , 16 May 2019 at 06:30 PM
Chinese will respect a verbal contract - the difficulty is getting them to say the terms in front of other Chinese. Lieing to you is permissible.

Our business solved the problem by using irrevocable letters of credit. That way we could both blame the banks and not accuse each other of skulduggery. Hence Face was always kept intact.

walrus , 16 May 2019 at 07:37 PM
For the record and to preclude pointless ad hominem attacks, the Chinese are intelligent hard working people for whom sophisticated business and finance was a way of life while we were still living in mud huts. They revere education. They do not subscribe to Modern Judeo Christian ethics but a much older Confucian creed. For that reason pleas for China to 'play by the rules" just do not compute.

China is not some modern, fly by night, Westphalian creation. You are dealing with the Middle Kingdom - 3000 years old and the Chinese, after centuries of oppression now demand respect. The idea that once again the West can dictate to China is offensive to Chinese and, considering their economy, downright delusional.

China has its problems. Face as a concept does not extend beyond family and immediate friends, so the concept of higher loyalty to a Chinese nation (ie patriotism) is not strong. Neither is respect for national law, nor respect for institutions or companies. This is the source of all commercial crime (eg: fraud, adulterated products pollution).

The governments reaction to the tendencies of its population include draconian punishments and now attempts at nationwide surveillance.

The problem Trump fails to recognise is that the CCP and its leaders have Face. Threaten that and China will become an implacable and unbeatable enemy.

John Merryman -> walrus ... , 16 May 2019 at 10:07 PM
The underlaying philosophies are in some ways diametrically opposed. We in the West are object and goal oriented, with an ideals based culture, while the East has more of a feedback oriented view, ie. Yin and Yang.

Even the concept of time is different, as we think of ourselves as individuals, thus moving through our context, the future is in front and the past behind, traveling the events of our lives. While the Eastern view is the past is in front and the future behind, as they see themselves as part of their context and necessarily witness events after they occur, then the situation continues.

Both are valid in their own context. Though our presumption of moving toward some ideal is flawed. When some is good, more is not always better. Consider efficiency, which is to do more with less. Then the ideal of efficiency would be to do everything with nothing. Those most committed to this view see Armageddon as the door to their ideal state.

What should be kept in mind about the East is that with Communism and the Party system, then becoming China Inc, to global capitalism, they have adopted essentially Western ideas and tried framing them through their own lens. The reason would be that such an ideals, goal oriented paradigm is very effective in the short and medium term, but creates that much more blowback, in the long term. While China might seem a threat to the current American status quo, the real danger is our own social and economic breakdown. We have been living on the equivalent of a national home loan since Reagan, if not Roosevelt and if the holders of that debt try calling it due, say trading it for remaining public assets, we will be revisiting feudalism.

The Russian and the Chinese, as well as the Iranians, etc. are really just boogie men, being thrown up to distract us. This Iranian situation seems to have be a total disconnect with reality. Something is brewing, whether planned, or just the wheels really coming off the train.

Both we and the Chinese seem to be headed to our own versions of Brexit. The Russians went through it with the fall of the Soviet Union.

Fred -> walrus ... , 16 May 2019 at 11:15 PM
walrus,

"...the concept of higher loyalty..." Sounds like the Chinese exclusion act might have been a good idea afterall. How many generations in the US will it take for a Chinese national to actually assimiate and become "American"?

"...unbeatable enemy." The PRC is not the Middle Kingdom. President Xi is not the subject of Master Po's "Everlasting Wrong" and he is well aware that China is certainly not "unbeatable". These are trade negotiations and right now they need us one hell of a lot more than we need them. Convincing his fellows in the CCP of that is probably going to be harder for him than for Trump to do the same with Congress.

Keith Harbaugh , 16 May 2019 at 08:33 PM
Any opinions on this?:
"Former Trump Senior State Dept. Official Tells Beijing to Wait Until Trump is Removed " ,
by sundance at CTH , 2019-05-16
The Twisted Genius , 16 May 2019 at 09:14 PM
Walrus, I find the most illuminating thing about your informative post is the reaction you elicited. Comment after comment, in my opinion, illustrates some degree of unwillingness or inability to acknowledge and tolerate a culture clearly different from ours. I am reminded of a South Park episode called "Toleration" in which the whole town wrongly assumes toleration of the other requires wholehearted celebration of the other. Nothing could be further from the truth. There's plenty many of us don't like about today's Chinese culture and society, but it's their culture and society. They don't have to conform to our ways anymore than we have to conform to theirs, but we should acknowledge the difference and deal with it.
Jack said in reply to The Twisted Genius ... , 17 May 2019 at 11:42 AM
TTG,

In the name of tolerance of another culture are we going to surrender to their predatory behavior? Are we going to allow the Chinese to continue to "beat us at our own game" as Walrus alludes? Sure the Party of Davos have benefited from the current relationship but why should the US in it's national interest continue to allow an authoritarian state to steal our IP, subsidize their companies to dump products in our market and prevent our companies to sell into their market unless they transfer technology, only to have it stolen?

That type of predatory behavior is not about cultural difference but taking advantage of a situation that we allowed. Tariffs may not be the best strategy but at least Trump is saying the current arrangement no longer works. It makes no sense to say in order to protect Chinese "face" we should continue this arrangement where we have the short end of the deal. I hope that Trump doesn't back down in the face of Chinese influence operations in the US and his perception of what's best for his reelection. IMO, the Chinese threat is significantly larger than any threat from Russia or Iran, and saying we should walk on eggshells to not offend their cultural sensibilities is frankly ridiculous.

I believe Walrus over-estimates their strengths. There is a reason why their "best and brightest" continue to immigrate to Silicon Valley in droves. I know some of them personally as I have backed their entrepreneurial ventures. They will be the first to tell you that they have given up a lot in terms of familial connection to immigrate to the US as they don't share nor do they want their kid's futures to be subject to the capriciousness of Xi Jinping's authoritarian vision.

The Twisted Genius -> Jack... , 18 May 2019 at 11:21 AM
Jack, why surrender to their predatory behavior? Just stop dealing with them. Stop allowing American nationalists to buy Chinese made goods and stop selling China our goods. Why not make the stuff ourselves or learn to do without? Why are those American farmers growing soybeans for the Chinese. Let them grow stuff for Americans. Sure this approach is even more extreme that the current tariff war, but it will make us immune to Chinese predatory practices, won't it? The isolation of Sakoku as the purest form of American nationalism. As an added benefit of implementing a policy of Sakoku, there would be no more American foreign adventurism.

I say this tongue in cheek realizing it will never be implemented. But wouldn't this a better implementation of American nationalism than demanding that all other countries simply bend to our demands in all matters?

Jack said in reply to The Twisted Genius ... , 18 May 2019 at 09:47 PM
TTG,

I wholeheartedly agree with you that we should end our overseas interventionism. I've opposed it for a long time from Vietnam to Iraq & Syria. The costs in the trillions of dollars, the destabilization of fragile societies to the unnecessary sacrifices of our soldiers and their families have not provided any meaningful benefit to us.

As far as China is concerned I believe the situation is more complex. One thing I've noticed in general and exemplified by the comments on this thread is the conflation of the heritage and Confucian values of the Chinese people on the CCP. Let's not be under any illusion. The CCP is unabashedly totalitarian. I've no quarrel with the Chinese people. On the contrary they have my deepest sympathies for having to endure under the boot of the CCP.

Of course any change in their form of government is for them to effect just as our forefathers did here. The important point that I believe needs to be made is that we provided the finance, the technology and the markets to enable the economic development of an authoritarian regime. An argument can be made that those early decisions to bring in China into the global economic framework was in the belief it would enable them to reform. I was persuaded then by Sir James Goldsmith & Ross Perot and others that the GATT trade deal driven by Wall St would be a disaster for our working class. Neither Bill Clinton nor the Republicans asked the question then what if the CCP doesn't reform and instead intensifies their authoritarianism?

Of course the big transfer of our industrial base was completely our own doing as our political system is fully captured by the Party of Davos. In retrospect it should be clear that the CCP never intended to relinquish their monopoly on power and would become even more repressive to maintain it. The CCP is not our friend. They are an implacable enemy who are now using their growing economic and military strength to directly interfere and subvert our societies. The scale of their influence operations and the direct use of cash to purchase influence and espionage is something much larger than at the depth of the Cold War with the Soviet Union. It is high time we understand this threat and act. At least Trump in his own limited way gets that something needs to change even if in his mind it is purely transactional. I'd like to highlight a current example where the Trump administration is moving to ban Huawei from our market. Opeds are being furiously written and published in our national media in defense of Huawei, while the company hires the top cybersecurity official in the Obama administration with top secret clearance as their lobbyist. There are no Opeds here or in China that Google, Facebook, and other US companies are banned in China. Why is that? IMO, it's because we accept the authoritarianism of the CCP. The neocons made a lot of noise demonizing Sadam & Assad as brutal dictators, yet they're silent as Xi Jinping has millions of Uighurs in concentration camps. If we don't act to check the CCP now our grandchildren will regret it as they'll have to fight a war.

Johnb , 16 May 2019 at 11:05 PM
Quote -"The idea that once again the West can dictate to China is offensive to Chinese and, considering their economy, downright delusional."
I believe this is the underlying driver to the individual Chinese acceptance of the cost to any conflict, it also links directly to what they see as a Century of Humiliation where China wasn't powerful. The very use of the word Humiliation in any translation directly links into their concept of Face.
Quote- "China has its problems, Face as a concept does not extend beyond family and immediate friends"

I believe to extend and change this cultural concept of what constitutes Face is behind the national introduction of Social Credit scores for all citizens and available on line to all citizens. It is in fact intended as a national reputation system whereby an unrelated Chinese can lose Face when interacting with other citizens. China is the elephant in the room in any Western political, defence and economic policy debate.

Alves , 17 May 2019 at 02:10 AM
IMHO, the USA holds most of the cards in this negotiation:

1. The USA trade deficit with China is huge and China needs to sell to the USA, as it will not find other countries to make up for the lost market.

2. It is not uncommon for supply chains to change. Goods that today are manufactured in China will likely be made in other asian countries which have even lower wages if the trade war really goes for a significant amount of time.

3. The inflationary and GDP contraction risk of a trade war is not that high, as the imported chinese goods make up only 2,3% of the USA GDP.

4. The fact that China has lots of USA sovereign debt is not something that can not be solved by the FED. A few economists have already pointed that in the past 5 or 10 years.

5. China already is an enemy of the USA. Worst case, it will be more active in the hotspots in the World, instead of only spying and hacking the hell out of the USA.

So, do not panic. The ones that should be panicking are the chinese.

Anon , 17 May 2019 at 09:11 AM
China gets our middle class and the west gets cheap socks in return.As our middle class disappears overseas our cheap socks become unaffordable because there are no jobs for our young workers.The only way to get our middle class back is to stop buying cheap socks.or to put the price up on our middle class.any idiot can make cheap socks but middle class is priceless.the backbone of a stable society.Secondly any society that lives beyond its means through over population is doomed and under no circumstances must it be allowed to expand.China's growing affluence will increase competition for resources as it's middle class expands and this will lead to conflict.Cheap socks might end up causing WWIII
SRW , 17 May 2019 at 09:36 AM
Interesting article by David P. Goldman, Asia Times, about how to deal with China.

https://www.asiatimes.com/2019/04/opinion/the-chinese-tortoise-and-the-american-hare/

jdledell , 17 May 2019 at 06:36 PM
Just as a reminder - having run International businesses, I just want to clarify that U.S. Businesses are not saints. There is a certain amount of cheating, browbeating and stealing as long as we don't get caught and profits are increasing.

We might not like the Chinese using our methods but that is the way the cookie crumbles. At this point about two-thirds of Prudential's profits come from overseas subsidiaries and one of the reasons for that success is our ability to mimic what works in their domestic companies and to do it somewhat better and cheaper.

Since the profits were repatriated to the U.S., I had to deal with a lot of government flack about hurting their domestic companies and their employees.

Mightypeon , 17 May 2019 at 07:38 PM
From my own interactions with the Chinese:

1: Highly sophisticated Culture. They tend to react pretty well if one can show a more then basic degree of understanding of their history.

2: They greatly prefer nuance. Simple answers imply simple minds.

3: I have not been in the position to actually have to get formal contracts with them. I can certainly echo however that making a Chinese promise something in front of other Chinese about whose perception he cares is usually sufficient to have a pretty honorable commitment to something, it is often easier said then done.

4: I initially had some disdain for the Chinese way of not directly letting you know how annoyed they are at any given point (Russians are fairly straightforward in this), but essentially, their point of view is also that if you are incapable of assessing how annoyed they are you are not a valid negotiation partner.

5: Also, keeping annoyance beneath the radar does not create scenes, and if a scene is created reactions may have to be forced. Vengeance is a thing with the Chinese . My impression is that they can be mollified though, and generally regard vengeance as an expensive luxury item, I also got the impression that you need to go out of your way to seriously become a target of vengeance, just professional disagreements are not a cause for vengeance, especially not if you are a foreigner. They also have a pathway of not having to take vengeance to save their faces by asserting that the offender is insane/feebleminded/crazy and thus beneath vengeance. Its not a position you want to be in though.

6: It goes a pretty long way to be aware of some more imaginative things that especially state aligned business can do if you are in China. Things like precision weighing any electronic equipment you take there before and after are just best practice.

[May 20, 2019] On America's Hostile Coexistence with China

May 18, 2019 | www.zerohedge.com
Via ChasFreeman.net, Remarks to the Freeman Spogli Institute for International Studies China Program

Ambassador Chas W. Freeman, Jr. (USFS, Ret.)
Senior Fellow, Watson Institute for International and Public Affairs, Brown University
Stanford, California, 3 May 2019

President Trump's trade war with China has quickly metastasized into every other domain of Sino-American relations. Washington is now trying to dismantle China's interdependence with the American economy, curb its role in global governance, counter its foreign investments, cripple its companies, block its technological advance, punish its many deviations from liberal ideology, contest its borders, map its defenses, and sustain the ability to penetrate those defenses at will.

The message of hostility to China these efforts send is consistent and apparently comprehensive. Most Chinese believe it reflects an integrated U.S. view or strategy. It does not.

There is no longer an orderly policy process in Washington to coordinate, moderate, or control policy formulation or implementation. Instead, a populist president has effectively declared open season on China. This permits everyone in his administration to go after China as they wish. Every internationally engaged department and agency – the U.S. Special Trade Representative, the Departments of State, Treasury, Justice, Commerce, Defense, and Homeland Security – is doing its own thing about China. The president has unleashed an undisciplined onslaught. Evidently, he calculates that this will increase pressure on China to capitulate to his protectionist and mercantilist demands. That would give him something to boast about as he seeks reelection in 2020.

Trump's presidency has been built on lower middle-class fears of displacement by immigrants and outsourcing of jobs to foreigners. His campaign found a footing in the anger of ordinary Americans – especially religious Americans – at the apparent contempt for them and indifference to their welfare of the country's managerial and political elites. For many, the trade imbalance with China and Chinese rip-offs of U.S. technology became the explanations of choice for increasingly unfair income distribution, declining equality of opportunity, the deindustrialization of the job market, and the erosion of optimism in the United States.

In their views of China, many Americans now appear subconsciously to have combined images of the insidious Dr. Fu Manchu, Japan's unnerving 1980s challenge to U.S. industrial and financial primacy, and a sense of existential threat analogous to the Sinophobia that inspired the Anti-Coolie and Chinese Exclusion Acts.

Meanwhile, the ineptitude of the American elite revealed by the 2008 financial crisis, the regular eruptions of racial violence and gun massacres in the United States, the persistence of paralyzing political constipation in Washington, and the arrogant unilateralism of "America First" have greatly diminished the appeal of America to the Chinese elite.

As a result, Sino-American interaction is now long on mutual indignation and very short on empirically validated information to substantiate the passions it evokes. On each side, the other is presumed guilty of a litany of iniquities. There is no process by which either side can achieve exoneration from the other's accusations. Guesstimates, conjectures, a priori reasoning from dubious assumptions, and media-generated hallucinations are reiterated so often that they are taken as facts. The demagoguery of contemporary American populism ensures that in this country clamor about China needs no evidence at all to fuel it. Meanwhile, Chinese nationalism answers American rhetorical kicks in the teeth by swallowing the figurative blood in its mouth and refraining from responding in kind, while sullenly plotting revenge.

We are now entering not just a post-American but post-Western era. In many ways the contours of the emerging world order are unclear. But one aspect of them is certain: China will play a larger and the U.S. a lesser role than before in global and regional governance. The Trump administration's response to China's increasing wealth and power does not bode well for this future. The pattern of mutual resentment and hostility the two countries are now establishing may turn out to be indelible. If so, the consequences for both and for world prosperity and peace could be deeply unsettling.

For now, America's relationship with China appears to have become a vector compounded of many contradictory forces and factors, each with its own advocates and constituencies. The resentments of some counter the enthusiasms of others. No one now in government seems to be assessing the overall impact on American interests or wellbeing of an uncoordinated approach to relations with the world's greatest rising power. And few in the United States seem to be considering the possibility that antagonism to China's rise might end up harming the United States and its Asian security partners more than it does China. Or that, in extreme circumstances, it could even lead to a devastating trans-Pacific nuclear exchange.

Some of the complaints against China from the squirming mass of Sinophobes who have attached themselves to President Trump are entirely justified. The Chinese have been slow to accept the capitalist idea that knowledge is property that can be owned on an exclusive basis. This is, after all, contrary to a millennial Chinese tradition that regards copying as flattery, not a violation of genius. Chinese businessfolk have engaged in the theft of intellectual property rights not just from each other but from foreigners. Others may have done the same in the past, but they were nowhere near as big as China. China's mere size makes its offenses intolerable. Neither the market economy in China nor China's international trade and investment relationships can realize their potential until its disrespect for private property is corrected. The United States and the European Union (EU) are right to insist that the Chinese government fix this problem.

Many Chinese agree. Not a few quietly welcome foreign pressure to strengthen the enforcement of patents and trademarks, of which they are now large creators, in the Chinese domestic market. Even more hope the trade war will force their government to reinvigorate "reform and opening." Fairer treatment of foreign-invested Chinese companies is not just a reasonable demand but one that serves the interests of the economically dominant but politically disadvantaged private sector in China. Chinese protectionism is an unlatched door against which the United States and others should continue to push.

But other complaints against China range from the partially warranted to the patently bogus. Some recall Hermann Göring's cynical observation at Nuremberg that: "The people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country." There is a lot of this sort of manipulative reasoning at play in the deteriorating U.S. security relationship with the Chinese. Social and niche media, which make everything plausible and leave no truth unrefuted, facilitate this. In the Internet miasma of conspiracy theories, false narratives, fabricated reports, fictive "facts," and outright lies, baseless hypotheses about China rapidly become firm convictions and long-discredited myths and rumors find easy resurrection.

Consider the speed with which a snappy phrase invented by an Indian polemicist – "debt-trap diplomacy" – has become universally accepted as encapsulating an alleged Chinese policy of international politico-economic predation. Yet the only instance of a so-called a "debt trap" ever cited is the port of Hambantota, commissioned by the since-ousted autocratic president of Sri Lanka to glorify his hometown. His successor correctly judged that the port was a white elephant and decided to offload it on the Chinese company that had built it by demanding that the company exchange the debt to it for equity. To recover any portion of its investment, the Chinese company now has to build some sort of economic hinterland for the port. Hambantota is less an example of a "debt trap" than of a stranded asset.

Then too, China is now routinely accused of iniquities that better describe the present-day United States than the People's Middle Kingdom. Among the most ironic of such accusations is the charge that it is China, not a sociopathic "America First" assault on the international status quo , that is undermining both U.S. global leadership and the multilateral order remarkably wise American statesmen put in place some seven decades ago. But it is the United States, not China, that is ignoring the U.N. Charter, withdrawing from treaties and agreements, attempting to paralyze the World Trade Organization's dispute resolution mechanisms, and substituting bilateral protectionist schemes for multilateral facilitation of international trade based on comparative advantage.

The WTO was intended as an antidote to mercantilism, also known as "government-managed trade." China has come strongly to support globalization and free trade. These are the primary sources of its rise to prosperity. It is hardly surprising that China has become a strong defender of the trade and investment regime Americans designed and put in place.

By contrast, the Trump administration is all about mercantilism – boosting national power by minimizing imports and maximizing exports as part of a government effort to manage trade with unilateral tariffs and quotas, while exempting the United States from the rules it insists that others obey.

I will not go on except to note the absurdity of the thesis that "engagement" failed to transform China's political system and should therefore be abandoned. Those who most vociferously advance this canard are the very people who used to complain that changing China's political order was not the objective of engagement but that it should be. They now condemn engagement because it did not accomplish objectives that they wanted it to have but used to know that it didn't . It is telling that American engagement with other illiberal societies (like Egypt, the Israeli occupation in Palestine, or the Philippines under President Duterte) is not condemned for having failed to change them.

That said, we should not slight the tremendous impact of America's forty-year opening to China on its socioeconomic development. American engagement with China helped it develop policies that rapidly lifted at least 500 million people out of poverty. It transformed China from an angry, impoverished, and isolated power intent on overthrowing the capitalist world order to an active, increasingly wealthy, and very successful participant in that order. It midwifed the birth of a modernized economy that is now the largest single driver of the world's economic growth and that, until the trade war intervened, was America's fastest growing overseas market. American engagement with China helped reform its educational system to create a scientific, technological, engineering, and mathematical ("STEM") workforce that already accounts for one-fourth of such workers in the global economy. For a while, China was a drag on human progress. It is now an engine accelerating it. That transformation owes a great deal to the breadth and depth of American engagement with it.

Nor should we underestimate the potential impact of the economic decoupling, political animosity, and military antagonism that U.S. policy is now institutionalizing. Even if the two sides conclude the current trade war, Washington now seems determined to do everything it can to hold China down. It seems appropriate to ask: can the United States succeed in doing this? What are the probable costs and consequences of attempting to do it? If America disengages from China, what influence, if any, will the United States have on its future evolution? What is that evolution likely to look like under conditions of hostile coexistence between the two countries?

Some likely answers, issue by issue.

First : the consequences of cutting back Sino-American economic interdependence.

The supply chains now tying the two economies together were forged by market-regulated comparative advantage. The U.S. attempt to impose government-dictated targets for Chinese purchases of agricultural commodities, semiconductors, and the like represents a political preemption of market forces. By simultaneously walking away from the Paris climate accords, TPP, the Iran nuclear deal, and other treaties and agreements, Washington has shown that it can no longer be trusted to respect the sanctity of contracts. The U.S. government has also demonstrated that it can ignore the economic interests of its farmers and manufacturers and impose politically motivated embargoes on them. The basic lesson Chinese have taken from recent U.S. diplomacy is that no one should rely on either America's word or its industrial and agricultural exports.

For these reasons, the impending trade "deal" between China and the United States – if there is one – will be at most a truce that invites further struggle. It will be a short-term expedient, not a long-term reinvigoration of the Sino-American trade and investment relationship to American advantage. No future Chinese government will allow China to become substantially dependent on imports or supply chains involving a country as fickle and hostile as Trump's America has proven to be. China will instead develop non-American sources of foodstuffs, natural resources, and manufactures, while pursuing a greater degree of self-reliance. More limited access to the China market for U.S. factories and farmers will depress U.S. growth rates. By trying to reduce U.S. interdependence with China, the Trump administration has inadvertently made the United States the supplier of last resort to what is fast becoming the world's largest consumer market.

The consequences for American manufacturers of "losing" the China market are worsened by the issue of scale. China's non-service economy already dwarfs that of the United States. Size matters. Chinese companies, based in a domestic market of unparalleled size, have economies of scale that give them major advantages in international competition. American companies producing goods – for example, construction equipment or digital switching gear – have just been put at a serious tariff disadvantage in the China market as China retaliates against U.S. protectionism by reciprocating it. One side effect of the new handicaps U.S. companies now face in the China market is more effective competition from Chinese companies, not just in China but in third country markets too.

Second : the U.S. effort to block an expanded Chinese role in global governance .

This is no more likely to succeed than the earlier American campaign to persuade allies and trading partners to boycott the Chinese-sponsored Asian Infrastructure Investment Bank (AIIB). That has isolated the United States, not China. Carping at the Belt and Road initiative and related programs from outside them does nothing to shape them to American advantage. It just deprives American companies of the profits they might gain from participating in them.

The United States seems to be acting out of nostalgia for the simplicities of a bipolar world order, in which countries could be pressured to stand with either the United States or its then rival. But China is not hampered by a dysfunctional ideology and economic system, as America's Soviet adversary was. What's more, today's China is an integral member of international society, not a Soviet-style outcast. There is now, quite literally, no country willing to accept being forced to make a choice between Beijing and Washington. Instead, all seek to extract whatever benefits they can from relations with both and with other capitals as well, if they have something to offer. The binary choices, diplomatic group-think, and trench warfare of the Cold War have been succeeded by national identity politics and the opportunistic pursuit of political, economic, and military interests wherever they can be served. Past allegiances do not anywhere determine current behavior.

The sad reality is that the United States, which led the creation of the Bretton Woods institutions that have been at the core of the post-World War II rule-bound international system, now offers these institutions and their members neither funding nor reform. Both are necessary to promote development as balances of supply, demand, wealth, and power shift. The new organizations, like the AIIB and the New Development Bank, that China and others are creating are not predatory intrusions into the domain of American-dominated international finance. They are necessary responses to unmet financial and economic demand. Denouncing them does not alter that reality.

Other countries do not see these organizations as supplanting pre-existing lending institutions long led by the United States. The new institutions supplement the World Bank Group and regional development banks. They operate under slightly improved versions of the lending rules pioneered by the Bretton Woods legacy establishments. China is a major contributor to the new development banks, but it does not exercise a veto in them as the U.S. does in the IMF and World Bank. The AIIB's staff is multinational (and includes Americans in key positions). The New Development Bank's first president is Indian and its principal lending activity to date has been in South Africa.

Washington has chosen to boycott anything and everything sponsored by China. So far, the sad but entirely predictable result of this attempt to ostracize and reduce Chinese influence has not curbed China's international clout but magnified it. By absenting itself from the new institutions, the United States is making itself increasingly irrelevant to the overall governance of multilateral development finance.

Third : the U.S. campaign to block China's international investments, cripple its technology companies, and impede its scientific and technological advance.

The actions of the Committee on Foreign Investment in the United States (CFIUS) to prevent Chinese investment in American industry and agriculture are well publicized and are becoming ever more frequent. So are official American denunciations of Chinese telecommunications companies like Huawei and ZTE amidst intermittent efforts to shut them down. In an ominous echo of World War I's anti-German, World War II's anti-Japanese, and the Cold War's anti-communist xenophobia, the FBI has begun issuing loud warnings about the menace posed by the large Chinese student presence on American campuses. Washington is adjusting visa policies to discourage such dangerous people from matriculating here. It has also mounted a strident campaign to persuade other countries to reject Chinese investments under the "Belt and Road" initiative.

In the aggregate, these policies represent a decision by the U.S. political elite to try to hamstring China, rather than to invest in strengthening America's ability to compete with it. There is no reason whatsoever to believe this approach can succeed. China's foreign direct investments have more than doubled over the past three years. Third countries are openly declining to go along with U.S. opposition to intensified economic relations with China. They want the capital, technology, and market openings that Chinese investment provides. U.S. denunciations of their interest in doing business with China are seldom accompanied by credible offers by American companies to match what their Chinese competitors offer. You can't beat something with nothing.

It's also not clear which country is most likely to be hurt by U.S. government obstruction of collaboration between Chinese and American STEM workers. There is a good chance the greatest damage will be to the United States. A fair number of native-born Americans seem more interested in religious myths, magic, and superheroes than in science. U.S. achievements in STEM owe much to immigration and to the presence of Chinese and other foreign researchers in America's graduate schools. The Trump administration is trying to curtail both.

China already possesses one-fourth of the world's STEM workforce. It is currently graduating three times as many STEM students annually as the United States. (Ironically, a significant percentage of STEM graduates in the United States are Chinese or other Asian nationals. Around half of those studying computer sciences in the United States are such foreigners.) American loss of contact with scientists in China and a reduced Chinese presence in U.S. research institutions can only retard the further advance of science in the United States.

China is rapidly increasing its investments in education, basic science, research, and development even as the United States reduces funding for these activities, which are the foundation of technological advance. The pace of innovation in China is visibly accelerating. Cutting Americans off from interaction with their Chinese counterparts while other countries continue risks causing the United States to fall behind not just China but other foreign competitors.

Finally : the U.S. military is in China's face .

The U.S. Navy and Air Force patrol China's coasts and test its defenses on a daily basis. U.S. strategy in the event of war with China – for example, over Taiwan – depends on overcoming those defenses so as to be able to strike deep into the Chinese homeland. The United States has just withdrawn from the treaty on intermediate nuclear forces in part to be able to deploy nuclear weapons to the Chinese periphery. In the short term, there is increasing danger of a war by accident, triggered by a mishap in the South China Sea, the Senkaku Archipelago, or by efforts by Taiwanese politicians to push the envelope of mainland tolerance of their island's unsettled political status quo . These threats are driving growth in China's defense budget and its development of capabilities to deny the United States continued military primacy in its adjacent seas.

In the long term, U.S. efforts to dominate China's periphery invite a Chinese military response on America's periphery like that formerly mounted by the Soviet Union. Moscow actively patrolled both U.S. coasts, stationed missile-launching submarines just off them, supported anti-American regimes in the Western Hemisphere, and relied on its ability to devastate the American homeland with nuclear weapons to deter war with the United States. On what basis does Washington imagine that Beijing cannot and will not eventually reciprocate the threat the U.S. forces surrounding China appear to pose to it?

Throughout the forty-two years of the Cold War, Americans maintained substantive military-to-military dialogue with their Soviet enemies. Both sides explicitly recognized the need for strategic balance and developed mechanisms for crisis management that could limit the risk of a war and a nuclear exchange between them. But no such dialogue, understandings, or mechanisms to control escalation now exist between the U.S. armed forces and the PLA. In their absence Americans attribute to the PLA all sorts of intentions and plans that are based on mirror-imaging rather than evidence.

The possibility that mutual misunderstanding will intensify military confrontation and increase the dangers it presents is growing. The chances of this are all the greater because the internal security and counterintelligence apparatuses in China and the United States appear to be engaged in a contest to see which can most thoroughly alienate the citizens of the other country. China is a police state. For Chinese in America, the United States sometimes seems to be on the way to becoming one.

It's hard to avoid the conclusion that, if Washington stays on its current course, the United States will gain little, while ceding substantial ground to China and significantly increasing risks to its wellbeing, global leadership, and security.

Economically , China will become less welcoming to American exports. It will pursue import substitution or alternative sourcing for goods and services it has previously sourced in the United States. With impaired access to the world's largest middle class and consumer economy, the United States will be pushed down the value chain. China's ties to other major economies will grow faster than those with America, adversely affecting U.S. growth rates. Any reductions in the U.S. trade deficit with China will be offset by increases in trade deficits with the countries to which current production in China is relocated.

China's role in global governance will expand as it adds new institutions and funds to the existing array of international organizations and takes a larger part in their management. The Belt and Road initiative will expand China's economic reach to every corner of the Eurasian landmass and adjacent areas. The U.S. role in global rule-making and implementation will continue to recede. China will gradually displace the United States in setting global standards for trade, investment, transport, and the regulation of new technologies.

Chinese technological innovation will accelerate, but it will no longer advance in collaboration with American researchers and institutions. Instead it will do so indigenously and in cooperation with scientists outside the United States. U.S. universities will no longer attract the most brilliant students and researchers from China. The benefits of new technologies developed without American inputs may be withheld rather than shared with America, even as the leads the United States has long enjoyed in science and technology one-by-one erode and are eclipsed. As cordiality and connections between China and the United States wither, reasons for Chinese to respect the intellectual property of Americans will diminish rather than increase.

Given the forward deployment of U.S. forces, the Chinese military has the great advantage of a defensive posture and short lines of communication. The PLA is currently focused on countering U.S. power projection in the last tenth or so of the 6,000-mile span of the Pacific Ocean. In time, however, it is likely to seek to match American pressure on its borders with its own direct military pressure on the United States along the lines of what the Soviet armed forces once did.

The adversarial relationship that now exists between the U.S. armed forces and the PLA already fuels an arms race between them. This will likely expand and accelerate. The PLA is rapidly shrinking the gap between its capabilities and those of the U.S. armed forces. It is developing a nuclear triad to match that of the United States. The good news is that mutual deterrence seems possible. The bad news is that politicians in Taiwan and their fellow travelers in Washington are determinedly testing the policy frameworks and understandings that have, over the past forty years, tempered military confrontation in the Taiwan Strait with dialogue and rapprochement. Some in Taiwan seem to believe that they can count on the United States to intervene if they get themselves in trouble with Chinese across the Strait. The Chinese civil war, suspended but not ended by U.S. unilateral intervention in 1950, seems closer to a resumption than it has been for decades.

As a final note on politico-military aspects of Sino-American relations, in the United States, security clearances are now routinely withheld from anyone who has spent time in China. This guarantees that few intelligence analysts have the Fingerspitzengefühl – the feeling derived from direct experience – necessary to really understand China or the Chinese. Not to worry. The administration disbelieves the intelligence community. Policy is now made on the basis of ignorance overlaid with media-manufactured fantasies. In these circumstances, some enterprising Americans have taken to combing the dragon dung for nuggets of undigested Chinese malevolence, so they can preen before those in power now eager for such stuff. There is a Chinese expression that nicely describes such pretense: 屎壳螂戴花儿 -- 又臭又美 – "a dung beetle with flowers in its hair still stinks."

All said, this does not add up to a fruitful approach to dealing with the multiple challenges that arise from China's growing wealth and power. So, what is to be done? 该怎么办?

Here are a few suggestions .

First , accept the reality that China is both too big and too embedded in the international system to be dealt with bilaterally. The international system needs to adjust to and accommodate the seismic shifts in the regional and global balances of wealth and power that China's rise is causing. To have any hope of success at adapting to the changes now underway, the United States needs to be backed by a coalition of the reasonable and farsighted. This can't happen if the United States continues to act in contempt of alliances and partnerships. Washington needs to rediscover statecraft based on diplomacy and comity.

Second , forget government-managed trade and other forms of mercantilism. No one can hope to beat China at such a statist game. The world shouldn't try. Nor should it empower the Chinese government to manage trade at the expense of market forces or China's private sector. Governments can and – in my opinion – should set economic policy objectives, but everyone is better off when markets, not politicians, allocate capital and labor to achieve these.

Third , instead of pretending that China can be excluded from significant roles in regional and global governance, yield gracefully to its inclusion in both. Instead of attempting to ostracize China, leverage its wealth and power in support of the rule-bound order in which it rose to prosperity, including the WTO.

Fourth , accept that the United States has as much or more to gain than to lose by remaining open to science, technology, and educational exchanges with China. Be vigilant but moderate. Err on the side of openness and transnational collaboration in progress. Work on China to convince it that the costs of technology theft are ultimately too high for it to be worthwhile.

Fifth and finally, back away from provocative military actions on the China coast. Trade frequent "freedom of navigation operations" to protest Chinese interpretations of the U.N. Convention on the Law of the Sea for dialogue aimed at reaching common understandings of relevant interests and principles. Ratify the Convention on the Law of the Sea and make use of its dispute resolution mechanisms. As much as possible, call off military confrontation and look for activities, like the protection of commercial shipping, that are common interests. Seek common ground without prejudice to persisting differences.

In conclusion : both China and the United States need a peaceful international environment to be able to address long-neglected domestic problems. Doing more of what we're now doing threatens to preclude either of us from sustaining the levels of peace, prosperity, and domestic tranquility that a more cooperative relationship would afford. Hostile coexistence between two such great nations injures both and benefits neither. It carries unacceptable risks. Americans and Chinese need to turn from the path we are now on. We can – we must – find a route forward that is better for both of us.

Thank you.


MushroomCloud2020 , 7 hours ago link

The article presents itself as being forward thinking, yet no mention of the robot revolution and how destabilizing it will be for both sides. As it stands today, it seems the economic conflict is between the US and China-perhaps. But when these robots come on line the economic war is going to be between the laborer and the employee world wide.

The demise of the US economy and manufacturing base in the US is a direct result of cheap labor, so one has a clear picture of what cheap labor will do. Outside of stuff falling from the sky for free, there isn't anything that will be more devastating to the world labor market than a robot enhanced with AI. Sure, products may become cheaper due to reduced labor cost, but if people do not have a job to raise enough income, then how are they going to buy stuff? Clearly, the whole capitalistic system will collapse and then what? What will be our choices? Will we have to shun progress in order to save the current system that has brought us all this wonderful labor saving innovation? Will people choose the hard road over the easy road? It seems to me that things always take the path of least resistance.

MushroomCloud2020 , 7 hours ago link

The only advantage China has is cheap labor.The robot revolution will upset the apple cart for both sides. It will be interesting, to say the least, when both sides realize that innovation is both a blessing and a curse.

Smi1ey , 9 hours ago link

This is a pretty good article, I agree with a lot of it. The part I don't like is the author's extreme worship of property rights.

He ignores the commons, things held in common by the people, things like science and culture. For example, Disney's copyright on its films will never expire if Disney can help it. Even an American's personal data is now someone else's private property, probably including their genetic data since even genes can be patented.

LEEPERMAX , 9 hours ago link

Fmr Navy Intel Officer:

Chinese Spy Ministry Operates in Silicon Valley . . . Big Time.

https://youtu.be/6lLP5zYKr_Q

[May 19, 2019] Tulsi Gabbard Says Boost From Putin Fans Is Fake News

May 19, 2019 | www.zerohedge.com
2 SHARES

Rep. Tulsi Gabbard (D-HI) said on Sunday that reports claiming pro-putin Russophiles giving her 2020 presidential campaign a boost is "fake news," though she added that conflict with the Kremlin is not productive.

Speaking to ABC' s George Stephanopoulos, Gabbard said that deteriorating relationships with nuclear-armed countries such as Russia and China "has brought us to a very dangerous point," reports The Hill . She added that, if elected, she would "end these counterproductive and wasteful regime change wars ," and would " work to end this new Cold War and nuclear arms race. "

me title=

On Friday, the Daily Beast published a story claiming that Gabbard "is quickly becoming the top candidate for Democrats who think the Russian leader is misunderstood," based on people who had donated to her campaign. (We somehow missed the Daily Beast article on Hillary's alleged Saudi donors in 2016, but we digress).

Donors to her campaign in the first quarter of the year included: Stephen F. Cohen, a Russian studies professor at New York University and prominent Kremlin sympathizer; Sharon Tennison, a vocal Putin supporter who nonetheless found herself detained by Russian authorities in 2016; and an employee of the Kremlin-backed broadcaster RT, who appears to have donated under the alias "Goofy Grapes." - Daily Beast

me title=

On Sunday, Stephanopoulos asked Gabbard about the Beast article, and noted that she met with Syrian President Bashar al-Assad, as well as her defense of Russia's military presence in Syria, and her comments suggesting that Russian election interference was on par with American election meddling around the world.

"Is Putin a threat to national security?" he asked.

"You now it's unfortunately you're citing that article, George, because it's a whole lot of fake news . What I'm focused on is what's in the best interest of the American people? What's in the best interest of national security? Keeping American people safe," said Gabbard. "And what I'm pointing out consistently, time and time again, is our continued wasteful regime change wars have been counterproductive to the interests of the American people and the approach this administration has taken in essentially choosing conflict ... has been counterproductive


BarkingCat , 39 minutes ago link

I had donated to her. I want to see her in the democratic debates.

Yes my only reason for doing so is because she is anti-was and wants to improve relations with Russia.

There is nothing beneficial about the current aggressive posture towards Russia and most other countries.

It will be very revealing how the other democrats deal with her position.

Greg , 31 minutes ago link

I continue to support her for that same reason. If there are like minded people here on ZH consider donating just $1 as that donation will help get her on stage where her anti-war thoughts can be heard.

samuraitrader , 19 minutes ago link

ditto. Trump said in the debates that "I want to be friends with everyone, including Russia." The rest is history. The USA wehrmacht is going after Tulsi now. We cannot have peace.

wadalt , 59 minutes ago link

regime change wars have been counterproductive to the interests of the American people...

... but very good for APARTHEID Israhell.

Son of Captain Nemo , 1 hour ago link

Hey Tulsi.

Have an idea for you on how to show true leadership and finish what the Orange "six-sided star" liar said he would pick up ( https://www.paulcraigroberts.org/2016/11/14/trump-im-reopening-911-investigation/ ) when he began his presidency and then... well... lied to become a treasonous bag of **** just like the ones that preceded him!...

Even Vlad Putin and the rest of the Russian Federation refuse to "touch it". And if you did. You would be the only representative in the U.S. House and Senate let alone the U.S. Federal, State and local government(s) for that matter to do so.

All you would have to say is "we need an understanding why 2 planes demolished 3 building(s) at "Ground Zero" more then 18 years ago, and why the 9/11 Commission never mentioned the Solomon Brothers Building 7 in it's official report?... I (Congresswoman Tulsi Gabbard) certainly want to know!... Especially wearing the uniform for what I believed was the reason I was given for invading Afghanistan and Iraq and murdering over 3 million people?... And I want to tell the American people ultimately "why" Building 7 was omitted along with too many other details that Robert Mueller famously dismissed by saying only that " mistakes were made " ...

I've written to you several times about showing the courage to be the only politician since Senator Wellstone to pick up where he left off and support the 13 year endeavors of this organization ( https://www.ae911truth.org/ ) to demand an investigation of the fact(s) now that has the backing of a Grand Jury by signing it's petition!...

But you won't. Because you are like every other "200lbs of ****" in a 100lbs bag that walks the halls of the Longworth carrying the water for the "Tribe"!

Keep telling yourself surfer **** that the job will get both easier and better by lying about that day and what it's done in it's wake to every institution and business in the United States of America let alone the laws of the land just like your mentor the Langley Bath House "boy"!...

dunlin , 1 hour ago link

Yes, Putin knows that an island of sanity and decency in a cesspit of bigotry and firearms is bound to be blown to pieces before she has a chance to deliver. I fear for Tulsi even now.

spoonful , 1 hour ago link

She sounds like the Trump of the 2020 campaign

Benito_Camela , 1 hour ago link

Yes, the Russia nonsense is FAKE NEWS. So why is Trump allowing the Israelis, a country that hates the United States, and which has attacked us at least twice (USS Liberty, 9/11/2001), to dictate our foreign policy? Israel is the real enemy!!

Let's look at a quote from one of the former employees of the Mossad front operation "Urban Moving Systems" (likely also the same people who planted the explosives at WTC) had to say about his time there:

In addition to the strange nature of some of the Israelis' possessions in the van and on their person, the company that employed them -- Urban Moving Systems -- was of special interest to the FBI, which concluded that the company was likely a "fraudulent operation." Upon a search of the company's premises, the FBI noted that "little evidence of a legitimate business operation was found." The FBI report also noted that there were an "unusually large number of computers relative to the number of employees for such a fairly small business" and that "further investigation identified several pseudo-names or aliases associated with Urban Moving Systems and its operations."

The FBI presence at the Urban Moving Systems search site drew the attention of the local media and was later reported on both television and in the local press. A former Urban Moving Systems employee later contacted the Newark Division with information indicating that he had quit his employment with Urban Moving Systems as a result of the high amount of anti-American sentiment present among Urban's employees. The former employee stated that an Israeli employee of Urban had even once remarked, "Give us twenty years and we'll take over your media and destroy your country" (page 37 of the FBI report ).

This kind of thing makes one kind of hope for a war in which Israel is bombed back to the stone age, which is clearly where these evil, psychopathic Zionist filth belong!

This is a long article, but read it all the way through. It's proof that Israel was indeed behind 9/11 and that they had numerous operatives in the country who were gleeful about it, having set up video cameras and celebrated the day before by taking a photo of one of the operatives holding a lit cigarette lighter up to the horizon....right in front of the still-standing WTC twin towers.

https://www.mintpressnews.com/newly-released-fbi-docs-shed-light-on-apparent-mossad-foreknowledge-of-9-11-attacks/258581/

For further reference:

https://www.scribd.com/document/409691150/FOIA-Release-of-9-11-Dancing-Israelis-thru-the-FBI

https://www.scribd.com/document/46173840/Dancing-Israelis-Police-Report

https://web.archive.org/web/20020802194310/http://abcnews.go.com/sections/2020/DailyNews/2020_whitevan_020621.html

Benito_Camela , 1 hour ago link

And look at this. You won't see this in the MSM any time soon:

In addition to Urban Moving Systems, another moving company, Classic International Movers, became of interest in connection with the investigation into the "Dancing Israelis," which led to the arrest and detention of four Israeli nationals who worked for this separate moving company. The FBI's Miami Division had alerted the Newark Division that Classic International Movers was believed to have been used by one of the 19 alleged 9/11 hijackers before the attack, and one of the "Dancing Israelis" had the number for Classic International Movers written in a notebook that was seized at the time of his arrest. The report further states that one of the Israelis of Classic International Movers who was arrested "was visibly disturbed by the Agents' questioning regarding his personal email account."

[May 19, 2019] Look at a quote from one of the former employees of the Mossad front operation "Urban Moving Systems"

May 19, 2019 | www.zerohedge.com

regime change wars have been counterproductive to the interests of the American people...

... but very good for APARTHEID Israhell.

ALL MidEast terrorism and warmongering are for APARTHEID Israhell.


Son of Captain Nemo , 1 hour ago link

Hey Tulsi.

Have an idea for you on how to show true leadership and finish what the Orange "six-sided star" liar said he would pick up ( https://www.paulcraigroberts.org/2016/11/14/trump-im-reopening-911-investigation/ ) when he began his presidency and then... well... lied to become a treasonous bag of **** just like the ones that preceded him!...

Even Vlad Putin and the rest of the Russian Federation refuse to "touch it". And if you did. You would be the only representative in the U.S. House and Senate let alone the U.S. Federal, State and local government(s) for that matter to do so.

All you would have to say is "we need an understanding why 2 planes demolished 3 building(s) at "Ground Zero" more then 18 years ago, and why the 9/11 Commission never mentioned the Solomon Brothers Building 7 in it's official report?... I (Congresswoman Tulsi Gabbard) certainly want to know!... Especially wearing the uniform for what I believed was the reason I was given for invading Afghanistan and Iraq and murdering over 3 million people?... And I want to tell the American people ultimately "why" Building 7 was omitted along with too many other details that Robert Mueller famously dismissed by saying only that " mistakes were made " ...

I've written to you several times about showing the courage to be the only politician since Senator Wellstone to pick up where he left off and support the 13 year endeavors of this organization ( https://www.ae911truth.org/ ) to demand an investigation of the fact(s) now that has the backing of a Grand Jury by signing it's petition!...

But you won't. Because you are like every other "200lbs of ****" in a 100lbs bag that walks the halls of the Longworth carrying the water for the "Tribe"!

Keep telling yourself surfer **** that the job will get both easier and better by lying about that day and what it's done in it's wake to every institution and business in the United States of America let alone the laws of the land just like your mentor the Langley Bath House "boy"!...

dunlin , 1 hour ago link

Yes, Putin knows that an island of sanity and decency in a cesspit of bigotry and firearms is bound to be blown to pieces before she has a chance to deliver. I fear for Tulsi even now.

spoonful , 1 hour ago link

She sounds like the Trump of the 2020 campaign

Benito_Camela , 1 hour ago link

Yes, the Russia nonsense is FAKE NEWS. So why is Trump allowing the Israelis, a country that hates the United States, and which has attacked us at least twice (USS Liberty, 9/11/2001), to dictate our foreign policy? Israel is the real enemy!!

Let's look at a quote from one of the former employees of the Mossad front operation "Urban Moving Systems" (likely also the same people who planted the explosives at WTC) had to say about his time there:

In addition to the strange nature of some of the Israelis' possessions in the van and on their person, the company that employed them -- Urban Moving Systems -- was of special interest to the FBI, which concluded that the company was likely a "fraudulent operation." Upon a search of the company's premises, the FBI noted that "little evidence of a legitimate business operation was found." The FBI report also noted that there were an "unusually large number of computers relative to the number of employees for such a fairly small business" and that "further investigation identified several pseudo-names or aliases associated with Urban Moving Systems and its operations."

The FBI presence at the Urban Moving Systems search site drew the attention of the local media and was later reported on both television and in the local press. A former Urban Moving Systems employee later contacted the Newark Division with information indicating that he had quit his employment with Urban Moving Systems as a result of the high amount of anti-American sentiment present among Urban's employees. The former employee stated that an Israeli employee of Urban had even once remarked, "Give us twenty years and we'll take over your media and destroy your country" (page 37 of the FBI report ).

This kind of thing makes one kind of hope for a war in which Israel is bombed back to the stone age, which is clearly where these evil, psychopathic Zionist filth belong!

This is a long article, but read it all the way through. It's proof that Israel was indeed behind 9/11 and that they had numerous operatives in the country who were gleeful about it, having set up video cameras and celebrated the day before by taking a photo of one of the operatives holding a lit cigarette lighter up to the horizon....right in front of the still-standing WTC twin towers.

https://www.mintpressnews.com/newly-released-fbi-docs-shed-light-on-apparent-mossad-foreknowledge-of-9-11-attacks/258581/

For further reference:

https://www.scribd.com/document/409691150/FOIA-Release-of-9-11-Dancing-Israelis-thru-the-FBI

https://www.scribd.com/document/46173840/Dancing-Israelis-Police-Report

https://web.archive.org/web/20020802194310/http://abcnews.go.com/sections/2020/DailyNews/2020_whitevan_020621.html

Benito_Camela , 1 hour ago link

And look at this. You won't see this in the MSM any time soon:

In addition to Urban Moving Systems, another moving company, Classic International Movers, became of interest in connection with the investigation into the "Dancing Israelis," which led to the arrest and detention of four Israeli nationals who worked for this separate moving company. The FBI's Miami Division had alerted the Newark Division that Classic International Movers was believed to have been used by one of the 19 alleged 9/11 hijackers before the attack, and one of the "Dancing Israelis" had the number for Classic International Movers written in a notebook that was seized at the time of his arrest. The report further states that one of the Israelis of Classic International Movers who was arrested "was visibly disturbed by the Agents' questioning regarding his personal email account."

[May 19, 2019] Some Shocking Facts on the Concentration of Ownership of the US Economy

Highly recommended!
Notable quotes:
"... Since the collapse of the Soviet Union, the world has not seen these levels of concentration of ownership. The Soviet Union did not die because of apparent ideological reasons but due to economic bankruptcy caused by its uncompetitive monopolistic economy. Our verdict is that the US is heading in the same direction. ..."
"... In a future instalment of this report, we will show that the oligarchization of America – the placing it under the rule of the One Percent (or perhaps more accurately the 0.1%, if not 0.01%) - has been a deliberate ideologically driven long-term project to establish absolute economic power over the US and its political system and further extend that to involve an absolute global hegemony (the latter project thankfully thwarted by China and Russia). ..."
"... In present-day United States a few major investors – equity funds or private capital - are as a rule cross-owned by each other, forming investor oligopolies, which in turn own the business oligopolies. ..."
"... A study has shown that among a sample of the 1,500 largest US firms (S&P 1500), the probability of one major shareholder holding significant shares in two competing firms had jumped to 90% in 2014, while having been just 16% in 1999. (*2). ..."
"... Institutional investors like BlackRock, Vanguard, State Street, Fidelity, and JP Morgan, now own 80% of all stock in S&P 500 listed companies. The Big Three investors - BlackRock, Vanguard and State Street – alone constitute the largest shareholder in 88% of S&P 500 firms, which roughly correspond to America's 500 largest corporations. (*3). Both BlackRock and Vanguard are among the top five shareholders of almost 70% of America's largest 2,000 publicly traded corporations. (*4). ..."
May 19, 2019 | russia-insider.com

A close-knit oligarchy controls all major corporations. Monopolization of ownership in US economy fast approaching Soviet levels

Starting with Ronald Reagan's presidency, the US government willingly decided to ignore the anti-trust laws so that corporations would have free rein to set up monopolies. With each successive president the monopolistic concentration of business and shareholding in America has grown precipitously eventually to reach the monstrous levels of the present day.

Today's level of monopolistic concentration is of such unprecedented levels that we may without hesitation designate the US economy as a giant oligopoly. From economic power follows political power, therefore the economic oligopoly translates into a political oligarchy. (It seems, though, that the transformation has rather gone the other way around, a ferocious set of oligarchs have consolidated their economic and political power beginning from the turn of the twentieth century). The conclusion that the US is an oligarchy finds support in a 2014 by a Princeton University study.

Since the collapse of the Soviet Union, the world has not seen these levels of concentration of ownership. The Soviet Union did not die because of apparent ideological reasons but due to economic bankruptcy caused by its uncompetitive monopolistic economy. Our verdict is that the US is heading in the same direction.

In a later report, we will demonstrate how all sectors of the US economy have fallen prey to monopolization and how the corporate oligopoly has been set up across the country. This post essentially serves as an appendix to that future report by providing the shocking details of the concentration of corporate ownership.

Apart from illustrating the monopolization at the level of shareholding of the major investors and corporations, we will in a follow-up post take a somewhat closer look at one particularly fatal aspect of this phenomenon, namely the consolidation of media (posted simultaneously with the present one) in the hands of absurdly few oligarch corporations. In there, we will discuss the monopolies of the tech giants and their ownership concentration together with the traditional media because they rightfully belong to the same category directly restricting speech and the distribution of opinions in society.

In a future instalment of this report, we will show that the oligarchization of America – the placing it under the rule of the One Percent (or perhaps more accurately the 0.1%, if not 0.01%) - has been a deliberate ideologically driven long-term project to establish absolute economic power over the US and its political system and further extend that to involve an absolute global hegemony (the latter project thankfully thwarted by China and Russia). To achieve these goals, it has been crucial for the oligarchs to control and direct the narrative on economy and war, on all public discourse on social affairs. By seizing the media, the oligarchs have created a monstrous propaganda machine, which controls the opinions of the majority of the US population.

We use the words 'monopoly,' 'monopolies,' and 'monopolization' in a broad sense and subsume under these concepts all kinds of market dominance be it by one company or two or a small number of companies, that is, oligopolies. At the end of the analysis, it is not of great importance how many corporations share in the market dominance, rather what counts is the death of competition and the position enabling market abuse, either through absolute dominance, collusion, or by a de facto extinction of normal market competition. Therefore we use the term 'monopolization' to describe the process of reaching a critical level of non-competition on a market. Correspondingly, we may denote 'monopoly companies' two corporations of a duopoly or several of an oligopoly.

Horizontal shareholding – the cementation of the oligarchy

One especially perfidious aspect of this concentration of ownership is that the same few institutional investors have acquired undisputable control of the leading corporations in practically all the most important sectors of industry. The situation when one or several investors own controlling or significant shares of the top corporations in a given industry (business sector) is referred to as horizontal shareholding . (*1). In present-day United States a few major investors – equity funds or private capital - are as a rule cross-owned by each other, forming investor oligopolies, which in turn own the business oligopolies.

A study has shown that among a sample of the 1,500 largest US firms (S&P 1500), the probability of one major shareholder holding significant shares in two competing firms had jumped to 90% in 2014, while having been just 16% in 1999. (*2).

Institutional investors like BlackRock, Vanguard, State Street, Fidelity, and JP Morgan, now own 80% of all stock in S&P 500 listed companies. The Big Three investors - BlackRock, Vanguard and State Street – alone constitute the largest shareholder in 88% of S&P 500 firms, which roughly correspond to America's 500 largest corporations. (*3). Both BlackRock and Vanguard are among the top five shareholders of almost 70% of America's largest 2,000 publicly traded corporations. (*4).

Blackrock had as of 2016 $6.2 trillion worth of assets under management, Vanguard $5.1 trillion, whereas State Street has dropped to a distant third with only $1 trillion in assets. This compares with a total market capitalization of US stocks according to Russell 3000 of $30 trillion at end of 2017 (From 2016 to 2017, the Big Three has of course also put on assets).Blackrock and Vanguard would then alone own more than one-third of all US publicly listed shares.

From an expanded sample that includes the 3,000 largest publicly listed corporations (Russell 3000 index), institutions owned (2016) about 78% of the equity .

The speed of concentration the US economy in the hands of institutions has been incredible. Still back in 1950s, their share of the equity was 10%, by 1980 it was 30% after which the concentration has rapidly grown to the present day approximately 80%. (*5). Another study puts the present (2016) stock market capitalization held by institutional investors at 70%. (*6). (The slight difference can possibly be explained by variations in the samples of companies included).

As a result of taking into account the common ownership at investor level, it emerges that the US economy is yet much more monopolized than it was previously thought when the focus had been on the operational business corporation alone detached from their owners. (*7).

The Oligarch owners assert their control

Apologists for monopolies have argued that the institutional investors who manage passive capital are passive in their own conduct as shareholders as well. (*8). Even if that would be true it would come with vastly detrimental consequences for the economy as that would mean that in effect there would be no shareholder control at all and the corporate executives would manage the companies exclusively with their own short-term benefits in mind, inevitably leading to corruption and the loss of the common benefits businesses on a normally functioning competitive market would bring.

In fact, there seems to have been a period in the US economy – before the rapid monopolization of the last decade -when such passive investors had relinquished control to the executives. (*9). But with the emergence of the Big Three investors and the astonishing concentration of ownership that does not seem to hold water any longer. (*10). In fact, there need not be any speculation about the matter as the monopolist owners are quite candid about their ways. For example, BlackRock's CEO Larry Fink sends out an annual guiding letter to his subject, practically to all the largest firms of the US and increasingly also Europe and the rest of the West. In his pastoral, the CEO shares his view of the global conditions affecting business prospects and calls for companies to adjust their strategies accordingly.

The investor will eventually review the management's strategic plans for compliance with the guidelines. Effectively, the BlackRock CEO has in this way assumed the role of a giant central planner, rather like the Gosplan, the central planning agency of the Soviet command economy.

The 2019 letter (referenced above) contains this striking passage, which should quell all doubts about the extent to which BlackRock exercises its powers:

"As we seek to build long-term value for our clients through engagement, our aim is not to micromanage a company's operations. Instead, our primary focus is to ensure board accountability for creating long-term value. However, a long-term approach should not be confused with an infinitely patient one. When BlackRock does not see progress despite ongoing engagement, or companies are insufficiently responsive to our efforts to protect our clients' long-term economic interests, we do not hesitate to exercise our right to vote against incumbent directors or misaligned executive compensation."

Considering the striking facts rendered above, we should bear in mind that the establishment of this virtually absolute oligarch ownership over all the largest corporations of the United States is a relatively new phenomenon. We should therefore expect that the centralized control and centralized planning will rapidly grow in extent as the power is asserted and methods are refined.

Most of the capital of those institutional investors consists of so-called passive capital, that is, such cases of investments where the investor has no intention of trying to achieve any kind of control of the companies it invests in, the only motivation being to achieve as high as possible a yield. In the overwhelming majority of the cases the funds flow into the major institutional investors, which invest the money at their will in any corporations. The original investors do not retain any control of the institutional investors, and do not expect it either. Technically the institutional investors like BlackRock and Vanguard act as fiduciary asset managers. But here's the rub, while the people who commit their assets to the funds may be considered as passive investors, the institutional investors who employ those funds are most certainly not.

Cross-ownership of oligarch corporations

To make matters yet worse, it must be kept in mind that the oligopolistic investors in turn are frequently cross-owned by each other. (*11). In fact, there is no transparent way of discovering who in fact controls the major institutional investors.

One of the major institutional investors, Vanguard is ghost owned insofar as it does not have any owners at all in the traditional sense of the concept. The company claims that it is owned by the multiple funds that it has itself set up and which it manages. This is how the company puts it on their home page : "At Vanguard, there are no outside owners, and therefore, no conflicting loyalties. The company is owned by its funds, which in turn are owned by their shareholders -- including you, if you're a Vanguard fund investor." At the end of the analysis, it would then seem that Vanguard is owned by Vanguard itself, certainly nobody should swallow the charade that those funds stuffed with passive investor money would exercise any ownership control over the superstructure Vanguard. We therefore assume that there is some group of people (other than the company directors) that have retained the actual control of Vanguard behind the scenes (perhaps through one or a few of the funds). In fact, we believe that all three (BlackRock, State Street and Vanguard) are tightly controlled by a group of US oligarchs (or more widely transatlantic oligarchs), who prefer not to brandish their power. It is beyond the scope of this study and our means to investigate this hypothesis, but whatever, it is bad enough that as a proven fact these three investor corporations wield this control over most of the American economy. We also know that the three act in concert wherever they hold shares. (*12).

Now, let's see who are the formal owners of these institutional investors

In considering these ownership charts, please, bear in mind that we have not consistently examined to what degree the real control of one or another company has been arranged through a scheme of issuing different classes of shares, where a special class of shares give vastly more voting rights than the ordinary shares. One source asserts that 355 of the companies in the Russell index consisting of the 3000 largest corporations employ such a dual voting-class structure, or 11.8% of all major corporations.

We have mostly relied on www.stockzoa.com for the shareholder data. However, this and other sources tend to list only the so-called institutional investors while omitting corporate insiders and other individuals. (We have no idea why such strange practice is employed

[May 19, 2019] The US objective is to sustain US tech prominence by stifling Chinese plans to advance its economy.

May 19, 2019 | www.moonofalabama.org

Don Bacon , May 17, 2019 3:24:47 PM | link

The US objective is to sustain US tech prominence by stifling Chinese plans to advance its economy. Of course China will never agree to that.
from CFR..

The Chinese government has launched "Made in China 2025," a state-led industrial policy that seeks to make China dominant in global high-tech manufacturing. The program aims to use government subsidies, mobilize state-owned enterprises, and pursue intellectual property acquisition to catch up with -- and then surpass -- Western technological prowess in advanced industries.
For the United States and other major industrialized democracies, however, these tactics not only undermine Beijing's stated adherence to international trade rules but also pose a security risk. . . here

[May 19, 2019] Teresa May has been the common denominator in many of the sick things happening in the UK

Notable quotes:
"... Things have indeed moved on since the Skripal affair, not at least in terms of the prime minister Teresa May. It must now be clear to even the most dimwitted that she is a lunatic of note. This is obviously not something that has only come as a response to Brexit. However Brexit has shown her up as an utter idiot. ..."
"... Only a person of this caliper might be able to make any sense of the Skripal affair, and even if it makes perfect sense in her diseased mind, ..."
"... Teresa May has been the common denominator in many of the sick things happening in the UK, ..."
"... "And, according to Bustani, Bolton didn't mince words. "Cheney wants you out," Bustani recalled Bolton saying, referring to the then-vice president of the United States. "We can't accept your management style." ..."
"... Bolton continued, according to Bustani's recollections: "You have 24 hours to leave the organization, and if you don't comply with this decision by Washington, we have ways to retaliate against you." ..."
"... There was a pause. "We know where your kids live. You have two sons in New York."" ..."
"... The Brits have gone nuts. Maybe it is Karma for all the centuries of bad actions towards the rest of the world. Now that their DS manipulation is being exposed, what else are they going to do? Try to influence Putin? ..."
"... I don't think they've gone nuts. I think the UK is the center of the globalist cabal, and the cabal is on the back foot and getting desperate. 6 hours ago And the more desperate they are the more dangerous they become. And the Satanic head of this globalist cabal are the Rothschilds, who belong to the powerful Chabad Lubavitch cult, and who "made the modern banking system and the Fed that made Zionism, the world wars, the European Union, and so on." ..."
"... Between 2003 and 2013 "the Jared Khushner family foundation donated a total of $342,500 to various institutions and projects associated with the movement... in addition the Donald J Trump Foundation has donated $11,550 to three Chabad institutions." -- Kushners Belong to Jewish Supremacist Doomsday Group (that prophesies WWIII after which the Jews will rule). ..."
"... what is true is that May was judge, jury and executioner in convicting Russia of the poisoning and refused to follow an evidence based discovery process that lies at the heart of the UK justice system - by hiding behind those powers that the UK intelligence community "needs" in order to protect british (not russian, british) citizens from the sinister influences of foreign powers. ..."
"... the criminal activities of howler monkeys, like Strzok, Page, Brennan, McCabe, SUSAN RICE, Comey, Ohr, BIDEN, OBAMA, etc in the USA are bad enough (whilst hardly impacting civilian life in the US - BUT - the tactics used have been deployed to starve, cause disease, "dumb down", reduce life chances all over the middle east and elsewhere for countless millions of people. ..."
May 19, 2019 | www.zerohedge.com

[May 19, 2019] The OPCW, Douma, The Skripals

Notable quotes:
"... The neocon faction in the US is usually (and reasonably) regarded as the motivator behind much of the western aggression in the Middle East. ..."
"... Granted the US has been looking for excuses to intervene ever more overtly in Syria since 2013, and in that sense this Douma "initiative" is a continuation of their longterm policy. It's also true Russia was warning just such a false flag would be attempted in early March. But in the intervening month the situation on the ground has changed so radically that such an attempt no longer made any sense. ..."
"... A false flag in early March, while pockets of the US proxy army were still holding ground in Ghouta would have enabled a possible offensive in their support which would prevent Ghouta falling entirely into government hands and thereby also maintain the pressure on Damascus. A false flag in early April is all but useless because the US proxy army in the region was completely vanquished and nothing would be gained by an offensive in that place at that time. ..."
"... The US media has been similarly, and uncharacteristically divided and apparently unsure. Tucker Carlson railed against the stupidity of attacking Syria. Commentators on MSNBC were also expressing intense scepticism of the US intent and fear about possible escalation. ..."
"... The official story is a hot mess of proven falsehoods, contradictions, implausible conspiracy theories, more falsehoods and inexplicable silences were cricket chirps tell us all we need to know. ..."
"... The UK government has lied and evaded on every key aspect. ..."
"... Indeed if current claims by Russian FM Lavrov turn out to be true, a "novichok" (whatever that precisely means in this case) may not have been the only substance found in those samples, and a compound called "BZ", a non-lethal agent developed in Europe and America, has been discovered and suppressed in the OPCW report (more about that later). ..."
"... The Skripals themselves were announced to be alive and out of danger mere days after claims they were all but certain to die. Yulia, soon thereafter, apparently called her cousin Viktoria only to subsequently announce, indirectly through the helpful agency of the Metropolitan Police, that she didn't want to talk to her cousin – or anyone else – at all. ..."
"... She is now allegedly discharged from hospital and has "specially trained officers helping to take care of" her in an undisclosed location. A form or words so creepily sinister it's hard to imagine how they were ever permitted the light of day. ..."
"... If a false flag chemical attack had taken place in Syria at the time Russia predicted, just a week or two after the Skripal poisoning, a lot of the attention that's been paid to the Skripals over the last month would likely have been diverted. Many of the questions being asked by Russia and in the alt media may never have been asked as the focus of the world turned to a possible superpower stand-off in the Middle East. ..."
"... So, could it be the Skripal event was never intended to last so long in the public eye? Could it be that it was indeed a false flag, or a fake event, as many have alleged, planned as a sketchy prelude to, or warm up act for a bigger chemical attack in Syria, scheduled for a week or so later in mid-March – just around the time Russia was warning of such a possibility? ..."
"... This would explain why the UK may have been pushing for the false flag to happen (as claimed by Russia) even after it could no longer serve much useful purpose on the ground, and why the Douma "attack" seems to have been so sketchily done by a gang on the run. The UK needed the second part to happen in order to distract from the first. ..."
"... If this is true, Theresa May and her cabinet are currently way out on a limb even by cynical UK standards. Not only have they lied about the Skripal event, but in order to cover up that lie they have promoted a false flag in Syria, and "responded" to it by a flagrant breach of international and domestic law. Worst of all, if the Russians aren't bluffing, they have some evidence to prove some of the most egregious parts of this. ..."
"... But even if some or all of our speculation proves false, and even if the Russian claims of UK collusion with terrorists in Syria prove unfounded, May is still guilty of multiple lies and has still waged war without parliamentary approval. ..."
"... The UK were the most vocal about Syria, and desperately tried to drum up support over Skripal, but it all came to nothing much in the end. ..."
"... Theresa May's political career still hangs by a thread, and her "Falklands moment", at best, staved off the inevitable for a few months. A washout in the EU elections, a very real threat from Farage's Brexit party, and rumblings inside her own party, make her position as unstable as ever. ..."
"... In the US, generally speaking, it seems that the Trump admin – or at least whichever interested parties currently have control of the wheels of government – have called time on war in Syria. Instead, they've moved on to projects in Venezuela and North Korea, and even war with Iran. ..."
"... The failure of the Douma false flag to cause the war it was meant to cause, and the vast collection of evidence that suggests it was a false flag, should be spread far and wide. Not just because it's a truth which vindicates the smeared minority in the alternate media. ..."
May 19, 2019 | www.zerohedge.com

Via Off-Guardian.org,

In view of the latest revelations from the leaked report, which seem to prove that at least some elements of the Douma "chemical attack" were entirely staged, we want to take look back at the chaotic events of Spring 2018.

The following is an extract from an article by Catte originally published April 14th last year, which takes on a greater weight in light of certain evidence – not only that the Douma attack was faked, but that the OPCW is compromised.

You can read the whole article here .

* * *

PRIMARILY UK INITIATIVE?

The neocon faction in the US is usually (and reasonably) regarded as the motivator behind much of the western aggression in the Middle East.

Since at least 2001 and the launch of the "War on Terror" the US has led the way in finding or creating facile excuses to fight oil wars and hegemonic wars and proxy wars in the region. But this time the dynamics look a little different.

This time it really looks as if the UK has been setting the pace of the "response".

The fact (as stated above) that Mattis was apparently telegraphing his own private doubts a)about the verifiability of the attacks, and b)about the dangers of a military response suggests he was a far from enthusiastic partaker in this adventure.

Trump's attitude is harder to gauge. His tweets veered wildly between unhinged threats and apparent efforts at conciliation. But he must have known he would lose (and seemingly has lost) a great part of his natural voter base (who elected him on a no-more-war mandate) by an act of open aggression that threatened confrontation with Russia on the flimsiest of pretexts.

Granted the US has been looking for excuses to intervene ever more overtly in Syria since 2013, and in that sense this Douma "initiative" is a continuation of their longterm policy. It's also true Russia was warning just such a false flag would be attempted in early March. But in the intervening month the situation on the ground has changed so radically that such an attempt no longer made any sense.

A false flag in early March, while pockets of the US proxy army were still holding ground in Ghouta would have enabled a possible offensive in their support which would prevent Ghouta falling entirely into government hands and thereby also maintain the pressure on Damascus. A false flag in early April is all but useless because the US proxy army in the region was completely vanquished and nothing would be gained by an offensive in that place at that time.

You can see why Mattis and others in the administration might be reluctant to take part in the false flag/punitive air strike narrative if they saw nothing currently to be gained to repay the risk. They may have preferred to wait for developments and plan for a more productive way of playing the R2P card in the future.

The US media has been similarly, and uncharacteristically divided and apparently unsure. Tucker Carlson railed against the stupidity of attacking Syria. Commentators on MSNBC were also expressing intense scepticism of the US intent and fear about possible escalation.

The UK govt and media on the other hand has been much more homogeneous in advocating for action. No doubts of the type expressed by Mattis have been heard from the lips of an UK government minister. Even May, a cowardly PM, has been (under how much pressure?) voicing sterling certitude in public that action HAD to be taken.

Couple this with the – as yet unverified – claims by Russia of direct UK involvement in arranging the Douma "attack", and the claims by Syria that the perps are in their custody, and a tentative storyline emerges. It's possible this time there were other considerations in the mix beside the usual need to "be seen to do something" and Trump's perpetual requirement to appease the liberal Russiagaters and lunatic warmongers at home. Maybe this time it was also about helping the UK out of a sticky problem.

THE SKRIPAL CONSIDERATION

Probably the only thing we can all broadly agree on about the Skripal narrative is that it manifestly did not go according to plan. However it was intended to play out, it wasn't this way. Since some time in mid to late March it's been clear the entire thing has become little more than an exercise in damage-limitation, leak-plugging and general containment.

The official story is a hot mess of proven falsehoods, contradictions, implausible conspiracy theories, more falsehoods and inexplicable silences were cricket chirps tell us all we need to know.

The UK government has lied and evaded on every key aspect.

  1. It lied again and again about the information Porton Down had given it
  2. Its lawyers all but lied to Mr Justice Robinson about whether or not the Skripals had relatives in Russia in an unscrupulous attempt to maintain total control of them, or at least of the narrative.
  3. It is not publishing the OPCW report on the chemical analyses, and the summary of that report reads like an exercise in allusion and weasel-wording. Even the name of the "toxic substance" found in the Skripals' blood is omitted, and the only thing tying it to the UK government's public claims of "novichok" is association by inference and proximity.

Indeed if current claims by Russian FM Lavrov turn out to be true, a "novichok" (whatever that precisely means in this case) may not have been the only substance found in those samples, and a compound called "BZ", a non-lethal agent developed in Europe and America, has been discovered and suppressed in the OPCW report (more about that later).

None of the alleged victims of this alleged attack has been seen in public even in passing since the event. There is no film or photographs of DS Bailey leaving the hospital, no film or photographs of his wife or family members doing the same. No interviews with Bailey, no interviews with his wife, family, distant relatives, work colleagues.

The Skripals themselves were announced to be alive and out of danger mere days after claims they were all but certain to die. Yulia, soon thereafter, apparently called her cousin Viktoria only to subsequently announce, indirectly through the helpful agency of the Metropolitan Police, that she didn't want to talk to her cousin – or anyone else – at all.

She is now allegedly discharged from hospital and has "specially trained officers helping to take care of" her in an undisclosed location. A form or words so creepily sinister it's hard to imagine how they were ever permitted the light of day.

Very little of this bizarre, self-defeating, embarrassing, hysterical story makes any sense other than as a random narrative, snaking wildly in response to events the narrative-makers can't completely control.

Why? What went wrong? Why has the UK government got itself into this mess? And how much did the Douma "gas attack" and subsequent drive for a concerted western "response" have to do with trying to fix that?

IS THIS WHAT HAPPENED?

If a false flag chemical attack had taken place in Syria at the time Russia predicted, just a week or two after the Skripal poisoning, a lot of the attention that's been paid to the Skripals over the last month would likely have been diverted. Many of the questions being asked by Russia and in the alt media may never have been asked as the focus of the world turned to a possible superpower stand-off in the Middle East.

So, could it be the Skripal event was never intended to last so long in the public eye? Could it be that it was indeed a false flag, or a fake event, as many have alleged, planned as a sketchy prelude to, or warm up act for a bigger chemical attack in Syria, scheduled for a week or so later in mid-March – just around the time Russia was warning of such a possibility?

Could it be this planned event was unexpectedly canceled by the leading players in the drama (the US) when the Russians called them out and the rapid and unexpected fall of Ghouta meant any such intervention became pointless at least for the moment?

Did this cancelation leave the UK swinging in the wind, with a fantastical story that was never intended to withstand close scrutiny, and no second act for distraction?

So, did they push on with the now virtually useless "chemical attack", botch it (again), leaving a clear evidence trail leading back to them? Did they then further insist on an allied "response" to their botched false flag in order to provide yet more distraction and hopefully destroy some of that evidence?

This would explain why the UK may have been pushing for the false flag to happen (as claimed by Russia) even after it could no longer serve much useful purpose on the ground, and why the Douma "attack" seems to have been so sketchily done by a gang on the run. The UK needed the second part to happen in order to distract from the first.

It would explain why the US has been less than enthused by the idea of reprisals. Because while killing Syrians to further geo-strategic interests is not a problem, killing Syrians (and risking escalation with Russia) in order to rescue an embarrassed UK government is less appealing.

And it would explain why the "reprisals" when they came were so half-hearted.

If this is true, Theresa May and her cabinet are currently way out on a limb even by cynical UK standards. Not only have they lied about the Skripal event, but in order to cover up that lie they have promoted a false flag in Syria, and "responded" to it by a flagrant breach of international and domestic law. Worst of all, if the Russians aren't bluffing, they have some evidence to prove some of the most egregious parts of this.

This is very bad.

But even if some or all of our speculation proves false, and even if the Russian claims of UK collusion with terrorists in Syria prove unfounded, May is still guilty of multiple lies and has still waged war without parliamentary approval.

This is a major issue. She and her government should resign. But it's unlikely that will happen.

So what next? There is a sense this is a watershed for many of the parties involved and for the citizens of the countries drawn into this.

Will the usual suspects try to avoid paying for their crimes and misadventures by more rhetoric, more false flags, more "reprisals"? Or will this signal some other change in direction?

We'll all know soon enough.

* * *

Back to today...

...and while things have moved on, we're still puzzling over all the same issues.

All these questions stand, and are important, but more important than all of that is the lesson: They tried it before, and just because it didn't work doesn't mean they won't try it again.

Last spring, the Western powers showed they will deploy a false flag if they need too, for domestic or international motives. And they have the motives right now.

The UK were the most vocal about Syria, and desperately tried to drum up support over Skripal, but it all came to nothing much in the end.

Theresa May's political career still hangs by a thread, and her "Falklands moment", at best, staved off the inevitable for a few months. A washout in the EU elections, a very real threat from Farage's Brexit party, and rumblings inside her own party, make her position as unstable as ever.

Britain had the most to gain, of all NATO countries, and that is still true. We don't know what they might do.

This time they might even receive greater support from France this time around – since Macron is facing a revolution at home and would kill (possibly literally) for a nice international distraction.

In the US, generally speaking, it seems that the Trump admin – or at least whichever interested parties currently have control of the wheels of government – have called time on war in Syria. Instead, they've moved on to projects in Venezuela and North Korea, and even war with Iran.

That's not to say Syria is safe, far from it. They are always just one carefully place false-flag away from all-out war. Last year, Mattis (or whoever) decided war with Syria was not an option – that it was too risky or complicated. That might not happen next time.

Clearly, the US hasn't totally seen sense in terms of stoking conflict with Russia – as seen by the decision to pull out of the INF Treaty late last year. And further demonstrated by their attempts to overthrow Russia's ally Nicolas Maduro. Another ripe candidate for a false flag.

The failure of the Douma false flag to cause the war it was meant to cause, and the vast collection of evidence that suggests it was a false flag, should be spread far and wide. Not just because it's a truth which vindicates the smeared minority in the alternate media.

But because recognising what they were trying to do last time , is the best defense when they try it again next time .

[May 19, 2019] China State Run Media Broadcasts Anti-American Movies To Millions Amid Deepening Trade War

Notable quotes:
"... All last week, anti-American propaganda flourished across the country, with the slogan "Wanna talk? Let's talk. Wanna fight? Let's do it. Wanna bully us? Dream on!" going viral on Chinese social media platforms. ..."
May 19, 2019 | www.zerohedge.com

With the trade war between the US and China suddenly erupting after a 5-month ceasefire, CCTV 6, the movie channel of China's leading state television broadcaster, aired three anti-American movies last week, reported What's On Weibo .

The three movies are Korean war films: Heroic Sons and Daughters (1964), Battle on Shangganling Mountain (1954), and Surprise Attack (1960), which aired about one week after President Trump raised an existing 10% tariff on $200 billion worth of Chinese goods to 25%.

All last week, anti-American propaganda flourished across the country, with the slogan "Wanna talk? Let's talk. Wanna fight? Let's do it. Wanna bully us? Dream on!" going viral on Chinese social media platforms.

... ... ...

China's government broadcasting anti-American movies to hundreds of millions of its people shows how officials are starting up the propaganda machines ahead of a potential armed conflict with the US...


Pioneer.Valley.Man , 24 minutes ago link

Sounds like the Chinese should just be watching MSNBC or CNN ...

schroedingersrat , 43 minutes ago link

The US citizens get fucked by their own establishment for decades instead blame chinese. Cant be dumber than that :)

gro_dfd , 42 minutes ago link

Chinese spokesperson Hu Xijin writes: "there's no equal negotiation without fighting." No need for negotiation (or fighting). Assuming Trump imposes the rest of the tariffs, US trade with China will recede to nothing. Inciting anti-American feelings in mainland China just makes the break in relations easier. Goodbye China!

johnny two shoes , 7 minutes ago link

+ 1

China has no intention of going to actual war over trade with the U.S. - they have plenty of other potential markets, as is repeatedly alluded to here and elsewhere. This televised propaganda is about manipulating the attitudes of their own disillusioned, controlled populace.

Smi1ey , 45 minutes ago link

China State Run Media Broadcasts Anti-American Movies To Millions Amid Deepening Trade War

Meanwhile, America's Mockingbird Media continues to lie about everything from 911 to Venezuela.

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

Dr Anon , 45 minutes ago link

So they're broadcasting regular American television? Those shows do a great job demeaning and shitting on average American men while holding up minorities and freaks as capable people. They didn't need to invent any propaganda; just use the same **** *** producers have been feeding us dumb goyim for decades.

TheRapture , 53 minutes ago link

ZH is proof, if any more were needed, that all these crudely racist Americans are just not the sharpest tools in the shed.

Maybe the real cause of all anti-Chinese hate by Americans is rooted in IQ jealousy.

asadshah , 38 minutes ago link

Isage master of the The famous paper tiger threat of turning something into glass, empty fuckin threat from a country whose professional army has managed to lose every major conflict in the last 50 years to poorly equipped sometimes barefoot soldiers armed with nothing more that AK -47s.

please see Korean villagers, Vietnamese villagers, iraqi villagers, afghan villagers and Syrian Villagers.

and the vaunted Israelis who who only win against ancient armies with ancient gear, but faced with dedicated Hezbollah Lebanese villagers again .....lose.

Give it up, you are masters of snatching defeat from the jaws of victory... not much else.

NA X-15 , 47 minutes ago link

Just to rub it in the PLA trolls faces:

https://duckduckgo.com/?q=Chinese+factory+dorms+have+anti-suicide+nets&t=h_&ia=images&iax=images

Tachyon5321 , 57 minutes ago link

Trump should ban Weibo, Baidu and Sogou apps on Google and Apple phones because they are foreign controlled propaganda

malek , 54 minutes ago link

You prefer a diet of purely domestic controlled propaganda instead?

[May 18, 2019] On The Edge Of Disaster 59% Of Americans Are Living Paycheck-To-Paycheck

May 18, 2019 | www.zerohedge.com

Authored by Michael Snyder via The End of The American Dream blog,

Living on the edge, being dragged down by debt, and having little hope for the future is no way to live. But that is precisely where most Americans find themselves in 2019. Despite a supposedly "booming economy", the middle class continues to shrink and most of the country is barely scraping by from month to month. In fact, a brand new survey that was just released by Charles Schwab discovered that 59 percent of all Americans are currently living paycheck to paycheck

Overall, 59 percent of Americans live paycheck to paycheck, according to the survey of 1,000 U.S. adults by Charles Schwab.

However, the Millennial generation (people ages 23-38) was the most likely to struggle in between payday, at 62 percent, followed by Generation X (60 percent), Generation Z (55 percent) and Baby Boomers (53 percent).

[May 18, 2019] Democracy works in the USA is you abstract from such minor things as the level of connection of past US presidents to CIA, money in politics, pervasive propaganda and so on

May 18, 2019 | www.moonofalabama.org

Jackrabbit , May 17, 2019 8:54:11 PM | link

lysias: A president doesn't have to obey the orders of the powers that be ...

Well, that's why they select the President beforehand to ensure there are no inconvenient difficulties with a new President.

In fact, our President's have generally had a connection to CIA: Bush Sr. was CIA, Clinton is said to allowed their flights into Arkansas, GW Bush was son of CIA, Obama is said to have come from a CIA family (grandfather and probably mother) , and some have pointed to Trump's first casino deal as a possible CIA tie (related to money laundering of CIA drug money)

Pretending otherwise furthers the democracy works! narrative. Isn't it already clear that the West is feudal and Empire First (aka globalist) - despite Trump's faux populist pretense? US foreign policy has been remarkably consistent for over 20 years. US congressmen takes oaths to Israel. Western propaganda sing the Deep State tune.

Welcome to the rabbithole.

Jackrabbit , May 17, 2019 9:26:14 PM | link
dltravers @53: hope Trump loses [the elections] and the policy is reversed

In other words: democracy works!

Just ignore:

  • money in politics;
  • pervasive propaganda;
  • things you CAN'T vote for (absolute support for Israel and military adventures);
  • CIA connections to past Presidents;
  • loyalty oaths to Israel;
  • jailing of Assange (after unprecedented break of asylum protection);
  • the lies of past Presidents;
  • Cold War imperatives;
  • Sanders sheep-dogging;
  • dirty tricks against protest movements like Gillet Jeune and Occupy.
Welcome to the rabbit hole/

[May 18, 2019] Americans are good at Doublethink.

Notable quotes:
"... You point out that our entertainment industry focuses its plots on strong leaders, and Good Guys vs Bad Guys, and we definitely internalize that, especially when our overlords want to demonize another country, and use our entertainment-induced perspective as a shortcut. ..."
"... But, at the same time, on another level, Americans understand that the president is a puppet and must obey orders, or have his brains blown out in bright daylight, in the town square. ..."
"... We hold both these views simultaneously, hence, as Orwell called it, Doublethink. ..."
May 18, 2019 | www.moonofalabama.org

wagelaborer , May 17, 2019 6:33:45 PM | link

Jen @25. Americans are good at Doublethink.

You point out that our entertainment industry focuses its plots on strong leaders, and Good Guys vs Bad Guys, and we definitely internalize that, especially when our overlords want to demonize another country, and use our entertainment-induced perspective as a shortcut.

They tell us that the leader of the targeted country is a Bad Guy and we must kill the people in order to save them. And Americans nod and comply. Except for the 5% that prefers peace, and they argue that the leader is not a Bad Guy, so we shouldn't kill the people to save them.
No American ever thinks to argue international law or basic morality, we just argue about the plot lines.

But, at the same time, on another level, Americans understand that the president is a puppet and must obey orders, or have his brains blown out in bright daylight, in the town square.

We hold both these views simultaneously, hence, as Orwell called it, Doublethink.

[May 18, 2019] Are there any articles on how dependent Apple and Boeing are on Chinese components?

Boeing and Hollywood are two week stops that China can hit with impunity.
Notable quotes:
"... China has outspent the US on R&D since 2009 and now invests three times as much each year. ..."
"... The issue with these chips highlights just how ridiculous the American position is. The chips referred to are Intel processors they use in servers and qualcomm (arm core) processors in cell phones. Funny thing is, these processors are not even made in the US, and their replacement isn't that much of an issue, not for a company with the resources Huawei possesses. ..."
"... For government and other high security uses China has options like the MIPs based Loongson but that wouldn't work in the commercial environment so hopelessly devoted to x86 and windows. Probably the best solution would be to make an x86 analog like AMD markets, and it wouldn't take that long to do. ..."
"... The United States attacked China's largest telecom equipment maker Huawei. If China decides to retaliate, it could target chip giants like Qualcomm and Broadcom, which rely heavily on it for revenue, or tech giant Apple, which depends on them for iPhone manufacturing. ..."
"... Huawei's competitors Nokia and Ericsson would stand to win from the above ban as the United States and its allies would resort to them for 5G deployment. Nokia's and Ericsson's stocks rose more than 4% and 2% in early trading on May 16. . . here ..."
"... Chip fab is the only remaining significant technological lead that America retains anymore, but the raw engineering brainpower behind that industry in the US is mostly imported from China anyway. The Chinese have no shortage of brilliant engineers, they just have not really had the need to do without Intel and AMD before. Now they do. ..."
"... Within a year or so China will be producing chips as good as America's. Another year after that and America will be eclipsed in that industry. No longer will people be looking for "Intel Inside!" stickers on products but rather "Huawei Inside!" . ..."
"... What doesn't seem to be clear, or else ignored/excused here -- China is today just as globalist as the US and in fact the multinational corporations in control of both countries are inextricably linked, especially in the high tech sector currently under the intense MoA thread microscope. ..."
"... By our standards exploitation of workers in China is a grim picture , which compares with the grim blue collar conditions in the US, the equal and opposite result of the globalist equation wrt offshoring factory jobs endemic to capitalist production. ..."
"... MoA China "experts" should study the reality of globalization after removing the rose colored glasses if you wish to be considered analysts instead of merely wishful thinkers/cheerleaders of groupthink delusion. ..."
May 18, 2019 | www.moonofalabama.org

S , May 18, 2019 8:47:15 AM | link

@William Gruff #75: China is already producing world-class ARM chips. HiSilicon 's latest Kirin processors are on par with Qualcomm's Snapdragon and Samsung's Exynos processors. Apple's A-series is ahead of them all, but what does it matter if Apple's rising prices and falling quality are going to kill Apple anyway?

Schmoe , May 17, 2019 6:45:23 PM | link

Per Reuters, Huawei spends $11b on US components, and its ability to withstand this hit will vary by segment: "Huawei being unable to manufacture network servers, for example, because they can't get key U.S. components would mean they also stop buying parts from other countries altogether," said an executive at a Huawei chip supplier.

"They can relatively better manage component sourcing for mobile phones because they have their own component businesses for smartphones. But server and network, it's a different story," the executive said.

Are there any articles on how dependent Apple and Boeing are on Chinese components? This strategy seems incredibly short-sighted.

Godfree Roberts , May 17, 2019 7:30:34 PM | link
China has outspent the US on R&D since 2009 and now invests three times as much each year. That's why it's ahead technologically and scientifically.

By 2028, if current ratios hold, China will also outspend the US on defense. Won't that be interesting?

oglalla , May 17, 2019 7:34:09 PM | link
Remember the "Asian pivot"? Did Huawei and other critical tech companies start making independent chips back then? Or before? When were the tariffs planned? Speculation, anyone?
Indrid Cold , May 17, 2019 8:15:00 PM | link
The issue with these chips highlights just how ridiculous the American position is. The chips referred to are Intel processors they use in servers and qualcomm (arm core) processors in cell phones. Funny thing is, these processors are not even made in the US, and their replacement isn't that much of an issue, not for a company with the resources Huawei possesses.

Huawei already has its own arm based soc's it uses in it's high end phones and they can replace processors in it's low end phones with lesser versions of these.

The Intel processors will be tougher to do for the commercial market because of software compatibility issues.

For government and other high security uses China has options like the MIPs based Loongson but that wouldn't work in the commercial environment so hopelessly devoted to x86 and windows. Probably the best solution would be to make an x86 analog like AMD markets, and it wouldn't take that long to do.

Don Bacon , May 17, 2019 10:59:03 PM | link
from Market Realist. . .

The United States attacked China's largest telecom equipment maker Huawei. If China decides to retaliate, it could target chip giants like Qualcomm and Broadcom, which rely heavily on it for revenue, or tech giant Apple, which depends on them for iPhone manufacturing.

Huawei uses Qualcomm's modems in its high-end smartphones and has been in settlement talks with the chip supplier over a licensing dispute. Tensions between the United States and Huawei could delay this licensing settlement, sending Qualcomm's stock down 4.4% on May 16.

Huawei's competitors Nokia and Ericsson would stand to win from the above ban as the United States and its allies would resort to them for 5G deployment. Nokia's and Ericsson's stocks rose more than 4% and 2% in early trading on May 16. . . here

William Gruff , May 18, 2019 8:11:03 AM | link
"Soon U.S. chip companies will have lost all their sales to the second largest smartphone producer of the world. That loss will not be just temporarily, it will become permanent." --b

This is a crucial and important development. So long as China is just developing their domestic chip designs as an academic exercise they will forever trail behind the market leaders by at least one technological iteration. Why try so hard with chip designs that will only ever just be used in college degree theses papers and proof of concept models? Real innovation comes from scratching an itch; from fulfilling an actual need. Chip fab is the only remaining significant technological lead that America retains anymore, but the raw engineering brainpower behind that industry in the US is mostly imported from China anyway. The Chinese have no shortage of brilliant engineers, they just have not really had the need to do without Intel and AMD before. Now they do.

In the short term the transition will be painful for China. The first few iterations of their replacement chip designs will be buggy and not have the features of chips they could have bought for cheaper from the US. They will also have problems ramping up capacity to meet their needs. Typical growing pains, in other words. In the long term, though, this will be seen as the point at which the end started for America's chip tech dominance. Within a year or so China will be producing chips as good as America's. Another year after that and America will be eclipsed in that industry. No longer will people be looking for "Intel Inside!" stickers on products but rather "Huawei Inside!" .

donkeytale , May 18, 2019 9:57:42 AM | link
Isnt it clear the US is globalist? Uhhm, well, yes, it's only been clear for the prior 75 years at least. In fact Lenin laid it all out during WWI so one could say it's been clear for 100 years.

What doesn't seem to be clear, or else ignored/excused here -- China is today just as globalist as the US and in fact the multinational corporations in control of both countries are inextricably linked, especially in the high tech sector currently under the intense MoA thread microscope.

Why aren't Huawei making making more smartphone chips in production? Because so many Chinese component manufacturers are still heavily invested in churning out product for Apple. These companies employ millions in "relatively high paying" factory jobs and account for a large slice of Chinese export income and stock market capitalization. These corporate oligarchs supported by the Chinese government retain a vested interest in the status quo.

This is not to minimize Huawei or Chinese growing ability to compete at the design and innovation level as well as production, it is simply rightsizing the perspective to fit the reality. Huawei production is growing worldwide but this doesn't mean Apple or Samsung will evaporate or fall by the wayside and the Chinese need Apple and its markets too . In fact, Huawei is now willing for the first time to sell microchips to third party cell phone producers including Apple. Successful capitalist growth for China depends on increasing production into new products, technologies and markets not replacing current platforms with new. The product cycle will take care of itself in time anyway.

By our standards exploitation of workers in China is a grim picture , which compares with the grim blue collar conditions in the US, the equal and opposite result of the globalist equation wrt offshoring factory jobs endemic to capitalist production.

China is still in the industrial growth phase of its capitalist development, although beginning to transition to the higher phase for sure. Of course.

MoA China "experts" should study the reality of globalization after removing the rose colored glasses if you wish to be considered analysts instead of merely wishful thinkers/cheerleaders of groupthink delusion.

[May 18, 2019] Trump might get into deeper problem with China that he anticipated: if China assume that US is not desirable partner then can replicate many of key US technological areas and deprive US companies of revenue.

Trump calculation is probably that neoliberalism in China already corrupted Communist Party enough for US being able to destabilize the country buy depriving it of export revenue. And it is true that influence neoliberal Fifth column in china exists and can compete with Communist Party for power. If Trump timing is correct China will be crushed. If this in incorrect the USA might be crushed. This is a very high stake game as Trump burn bridges way too easily (being reckless and arrogant all his life). Bulling as a negotiating tactics might be OK for New York real estate market is not that good in negotiating with countries such as China.
Both countries are neoliberal countries but Chinese have more flexibility as remnants of Communist Party control remain in place. But the same remnants are also a bog danger, as China might find itself in the position of the USSR when the US crushed oil price and deprived it of much of its export revenue. In this case Communist Party will be blamed for social disruptions and might lose power due tot he power of Chine Fifth column of nouveau riche like happened in the USSR (opposition was supported by huge cash injections from the USA). I hope they study the USSR experience very carefully and will not repeat Gorbachov mistakes (although it is difficult, as it is very difficult to find a more stupid politician then Gorbachov, unless we assume that he was a traitor). Also the level of nationalism in China is much higher and that might help. In any case this uncharted territory for both China and the USA.
The Trump administration seems to have the illusion that if you raise the stakes high enough, other countries will cave to US demands. There might also be an element of creating foreign adversary in order to unite the domestic front. If Chinese will hold their position tight despite the pain, Trump might lose the election in 2020 as he will be unable to protect the economy for more then a year and the first signs of reception nullify his changes, as he will be blames for it.
Notable quotes:
"... This article titled 'Face' by Walrus over at SST is well worth a read alongside b's piece. https://turcopolier.typepad.com/sic_semper_tyrannis/2019/05/face-by-walrus.html ..."
"... Both these articles give a very clear picture of what the drunken louts 'Team Trump' are up against in their so called trade war. Very much like a drunken spectator climbing into the ring thinking he can take on a professional boxer. ..."
"... The US attack on China did not start with Trump. This is what Obama's military "Pivot to Asia" was about, as was the TPP, which explicitly was designed to develop an economic alliance that left China out. Capitalist trade wars are also not new, as are hot wars. They are part of capitalism. ..."
"... "Intellectual property" is a laughable assertion, an audacious attempt by the US to corner all human advances and claim them as the property of US capitalists, to be only used for their profits. As if! ..."
"... What an appalling ruling elite in the USA. Blamers and punishers. Never take any responsibility for their murderous acts ..."
"... The U.S. talks about pressuring China until they give in. China talks about a solution that respects the dignity of each party. ..."
"... I had the sudden realisation that US politics is essentially monarchist in its nature, for all the complicated legal and constitutional structures that have been built around it over the past 240+ years. US politics and culture are fixated on one individual with extreme powers; the superhero obsession in Hollywood is one symptom of that. ..."
"... In a way the US now resembles the Ottoman empire during that empire's Sultanate of Women period (late 1500s to mid-1700s) when sultans' power was dominated by their mothers, viziers and sometimes the janissaries who became a hereditary class during that period. ..."
"... Idolatry is universal. People always gravitate towards Alpha personalities. ..."
"... In looking into US culture and why it gives rise the type of leadership it has, I think it may be the belief in exceptionalism. Exceptionalism may also carry with it the belief that all other peoples want to be like them and all they (Americans) have to do is free those peoples from the nasty dictators ruling over them. ..."
"... Patrick Armstrong in one of his articles has said that in his dealings with US officials as Canadian ambassador or diplomat, is that American officials genuinely believed that all they had to do was overthrow the evil dictator and the people would welcome Americans or willingly join the US system. ..."
"... But, at the same time, on another level, Americans understand that the president is a puppet and must obey orders, or have his brains blown out in bright daylight, in the town square. ..."
"... We hold both these views simultaneously, hence, as Orwell called it, Doublethink. ..."
"... The British court said, no patent, no copyright and no monopoly can last longer than 7 years. that was 1787-89, and it explains the for a short time clause in the USA constitution. ..."
"... I don't think the US sees the world's nations as commanded by their senior politician. Far from it, but to keep the US public locked in a child's mentality, the govt and its MSM present every political event/action/reaction as between personalities. Can't have reason and logic breaking out among the minions can we? ..."
"... China's "competitive advantages" are too big for a confederation of micro-countries in the Pacific to overcome. ..."
"... b said;" the U.S. economic system is based on greed and not on the welfare of its citizens." Bingo! Jrabbit @ 52 said;"US foreign policy has been remarkably consistent for over 20 years." Maybe the last 100 yrs.? Demonize countries people and rulers, and take their stuff, but why not? We are, don't ya' know, the exceptional nation, doing gods work. Manifest Destiny, isn't it great? ..."
"... Smacking down China is a strategic priority for the Deep State. ..."
"... the neocons in the US believes it is now or never to defend the USA unique position as world power. They believe, that if they don't fight now, they will have lost. I say, they already have. ..."
"... Trust the UnitedSnake to blame the Chinese for reneging on an agreement ! Fact is, Trump's team Add in last minute conditions that are totally unacceptable to China. Chinese commentators are fuming at the audacity of the demands. 'WTF, Do they think we'r their gawd damned 51st state ?' ..."
"... Typical UnitedSnake's 'negotiation' tactics, designed to fail ! Thats how Clinton justity his bombing of ex Yugo, by blaming Belgrade for the breakdown of negotiation ,to justify its 78 days of aerial arsons against Yugo. ..."
May 18, 2019 | www.moonofalabama.org

jared , May 17, 2019 4:55:50 PM | link

This article titled 'Face' by Walrus over at SST is well worth a read alongside b's piece. https://turcopolier.typepad.com/sic_semper_tyrannis/2019/05/face-by-walrus.html

Also this Sputnik Article https://sputniknews.com/analysis/201905161075055767-china-us-trade-war/

Both these articles give a very clear picture of what the drunken louts 'Team Trump' are up against in their so called trade war. Very much like a drunken spectator climbing into the ring thinking he can take on a professional boxer.

@ Peter AU 1 | May 17, 2019 4:33:54 PM | 1 5 Trump

Trump wants improved trade conditions for improved economic climate in the U.S. But there are others in the admin who want something else.

But still: "backup chips it has independently developed" That's a good one Mr Moon.

wagelaborer , May 17, 2019 5:05:18 PM | link

The US attack on China did not start with Trump. This is what Obama's military "Pivot to Asia" was about, as was the TPP, which explicitly was designed to develop an economic alliance that left China out. Capitalist trade wars are also not new, as are hot wars. They are part of capitalism.

"Intellectual property" is a laughable assertion, an audacious attempt by the US to corner all human advances and claim them as the property of US capitalists, to be only used for their profits. As if!

https://wagelaborer.blogspot.com/2019/01/intellectual-property-and-war-on-china.html

uncle tungsten , May 17, 2019 5:12:28 PM | link
What an appalling ruling elite in the USA. Blamers and punishers. Never take any responsibility for their murderous acts. Rise up people, these are dangerous, stupid leaders and elites.
dh-mtl , May 17, 2019 5:13:10 PM | link
B says: Whatever face is at the top is only representing the layers below.

Yes, this is the case when complex governmental systems are functioning properly. In this case power is distributed throughout the system, based on the role each individual within the system. People must have a collaborative culture for complex systems to function properly.

People of an authoritarian nature hate complex systems and distributed power, as such systems limit the freedom of action of the authoritarian leader. The corollary to this is that systems must be kept simple to accommodate authoritarian leaders. And simple systems are much less powerful and effective than complex systems.

My observation is that, in the U.S., authoritarianism is the dominant culture, as opposed to a collaborative culture of the Chinese that is implied by B's comment.

Indeed we see many signs in these negotiations that the U.S. is operating based on a culture of authoritarianism, whereas China is operating based on a culture of collaboration. Among the signs:

  1. The tendency that B. noted of Americans to assign all power to the leader. (This is not the first time, and in fact it is a common mistake of the U.S. and one of the reasons that their regime change efforts almost never achieve a result that is favorable for the U.S.)
  2. The U.S. talks about winning and losing. China talks equity.
  3. The U.S. talks about pressuring China until they give in. China talks about a solution that respects the dignity of each party.

The principle behind negotiations for people of a collaborative culture is 'Win-Win or No-Deal'. For Authoritarians, Win-Win is a compromise, and compromise is the equivalent of a loss. My conclusion is that there is only a very low probability that the U.S. and China will successfully negotiate a trade deal. The cultures of the authoritarian Americans and the collaborative Chinese are too divergent. China will only accept Win-Win and the U.S. cannot accept Win-Win.

Winston2 , May 17, 2019 5:18:30 PM | link
Classic US empire strategy. Build up a supplier and when they start to be serious a competitor take them down. Asian Tiger crisis,forcing occupied Japan into the Plaza Accord etc. They left it too long with China, way too long. China has not recycled its trade dollars surplus into USTs since 2014. No replacement suppliers like Vietnam or Indonesia etc will do either, no more vendor finance for the US.

It will have to live within its means, no wonder the neocohens are going insane. We are watching the death of the $ as GRC first hand.

uncle tungsten , May 17, 2019 5:19:11 PM | link
@jared | May 17, 2019 4:55:50 PM | 18

NO jared, Trump is in charge, fully responsible and yet totally irresponsible. He hires and fires, he barks the orders, Trump is not captive. You may desperately wish to believe that but NO, Trump wants it like this and NO dissent.

This is Henry Kissinger's plan implemented by Trump. A war criminal implementing a sociopath war criminal's plan. Trump is a killer and an oligarchs stooge and he like the rewards.

See the fabulous Aaron Mate discussion previously linked in the last thread.

james , May 17, 2019 5:32:57 PM | link
thanks b... ditto peter au recommendation @16 on the article from walrus on face..
Jen , May 17, 2019 5:47:54 PM | link
I'd be curious to know what other MoA barflies think of the US tendency to personalize other countries' governments and political systems and reduce them all to monarchies of one sort or another, and what this says about the American psychology generally. So much of the US slather and accusations against Russia and China and what those nations are supposedly doing look like psychological projection of the US' own sins and malevolent behaviour.

I was in hospital nearly 20 years ago for a major operation and some of my recuperation there was spent watching a few old "Star Trek: Next Generation" episodes. Watching those shows, I was struck by how much "power" the Star Trek captain Jean-Luc Picard appeared to wield. Every one of his subordinates deferred to his decisions and very few challenged him.

I know this is an old TV show with scripts that emphasise individual action over collective action and delineating a whole culture on board the Starship fleet (this is a long time before "Game of Thrones") but I had the sudden realisation that US politics is essentially monarchist in its nature, for all the complicated legal and constitutional structures that have been built around it over the past 240+ years. US politics and culture are fixated on one individual with extreme powers; the superhero obsession in Hollywood is one symptom of that.

In a way the US now resembles the Ottoman empire during that empire's Sultanate of Women period (late 1500s to mid-1700s) when sultans' power was dominated by their mothers, viziers and sometimes the janissaries who became a hereditary class during that period.

Don Bacon , May 17, 2019 5:55:00 PM | link
@ dh-mtl 21
You provided an excellent analysis of two very different kinds of people, westerners and Asians (Chinese). Americans who believe that Chinese are pretty much like them, and respond to people, to pressures and and to situations in the same way, are badly mistaken.

I would add another: Westerners want instant results and quick profits whereas Chinese take the long view. Heck, they've been around for five thousand years so why not.

Lochearn , May 17, 2019 5:56:05 PM | link
I'm glad you raise the issue of increased prices for US consumers, b. I have been looking in vain for a mention of this even in alternative media. Nobody appears to be talking about it.

If I can go off track for a moment the events surrounding Boeing are highly significant and a parallel to what is happening generally in the US. Here is a something I wrote for naked capitalism but did not send - Yves is too fierce and I don't trust her. A bit like a feminine Colonel what's his name Laing...

Because of the prestige of Boeing Wall Street left its dimantling until quite late - 1997. GE and Ford had already produced their versions of the 737 Max in the 1960s with the Corvair and the Pinto respectively as finance people started to take over the running of US companies. There is something very sad in watching a once magnificent company reduced by bankers to a shadow of its former self.

dh , May 17, 2019 5:59:06 PM | link
There has been a trade imbalance for quite a while but it didn't seem to matter much. The Chinese raised their standard of living, Americans got cheap stuff, surplus dollars went into treasuries to fund the deficit. It all worked pretty well until Trump and MAGA. Somehow he thinks he'll bring the jobs back but no Americans are going to make sneakers and circuit boards for $2 an hour.
Ian , May 17, 2019 6:21:30 PM | link
@Jen | May 17, 2019 5:47:54 PM | 25:

Idolatry is universal. People always gravitate towards Alpha personalities.

dh | May 17, 2019 5:59:06 PM | 28:

Trump knows those manufacturing jobs aren't coming back and automation is the future. He's just parroting what his base wants to hear for votes.

Peter AU 1 , May 17, 2019 6:23:01 PM | link
Jen 25

I have just replied to Karlof1 in I think the previous thread and I link into this. In looking into US culture and why it gives rise the type of leadership it has, I think it may be the belief in exceptionalism. Exceptionalism may also carry with it the belief that all other peoples want to be like them and all they (Americans) have to do is free those peoples from the nasty dictators ruling over them.

Patrick Armstrong in one of his articles has said that in his dealings with US officials as Canadian ambassador or diplomat, is that American officials genuinely believed that all they had to do was overthrow the evil dictator and the people would welcome Americans or willingly join the US system.

OutOfThinAir , May 17, 2019 6:29:02 PM | link
All the economic momentum is in Eurasia, centering on China, India, and Russia. China is spearheading this drive and re-assuming its historical status as the richest land in the world. Instead of resisting, Washington should be working with projects like the BRI that help enrich everyone. (Indeed, why doesn't Washington announce a BRI for North/South America, perhaps a Yellow Brick Road? But that's an aside...)

And concerns about Chinese spying through their companies should be equaled with internal reflection about the practice in the United States. Perhaps it would be wise for both countries to develop and practice international standards that respect human rights in an Everything's Connected world.

Given how the US and China frequently treat "different" people with disdain, that's a lot to ask. But no country or people is spotless regarding abusing human rights and some wisdom with power would be welcome from both governments.

wagelaborer , May 17, 2019 6:33:45 PM | link
Jen @25. Americans are good at Doublethink.

You point out that our entertainment industry focuses its plots on strong leaders, and Good Guys vs Bad Guys, and we definitely internalize that, especially when our overlords want to demonize another country, and use our entertainment-induced perspective as a shortcut.

They tell us that the leader of the targeted country is a Bad Guy and we must kill the people in order to save them. And Americans nod and comply. Except for the 5% that prefers peace, and they argue that the leader is not a Bad Guy, so we shouldn't kill the people to save them.
No American ever thinks to argue international law or basic morality, we just argue about the plot lines.

But, at the same time, on another level, Americans understand that the president is a puppet and must obey orders, or have his brains blown out in bright daylight, in the town square.

We hold both these views simultaneously, hence, as Orwell called it, Doublethink.

snake , May 17, 2019 6:37:51 PM | link
China has succeeded because it does not honor copyright and patent monopolies. Western civilization is failing because it imposes the feudal monopoly by rule of law system.. The state will make sure a few fat cats are lords and the masses are their slaves.
---

The investment and salary classes have been screwing me since I was born. Now its time for all of us to feel the pain. And create a world that can benefit all of us. https://dedona.wordpress.com/2016/11/10/donald-trump-and-the-politics-of-resentment-john-michael-greer/ so @ 8 <== I agree..

---

It is almost asking the change of China's political system." <= no its not, the struggle today is freedom, human rights and the right to self determination not socialism vs capitalism.. it the struggle today is capitalism vs monopolism.. because monopolism aims to make every single human being alive its slave to a very few monopoly powered corporate giants.. China is a clear example of what can be if the masses are allowed to compete without the shackles of copyrights, patents and other thin air monopolies.

Some aspects of China's trade behavior can and should be criticized.

Why? Because of that "intellectual property" stuff? Japan basically built itself from the ground up in the post-war through allowed and unallowed intellectual property theft. Canon and Nikon, for example, essentially fac-similed Leica during that period; after the transition to digital, they erased their theft past, but it doesn't change the objective truth both wouldn't exist without stealing technology from a defeated country (Germany). It did the same with missile reentrance technology it stole from the USSR after the Cold War.

< Technology is a product of the human mind.. copyright and patents are thefts of the products of the human mind.. and human mind assets do not belong to anyone, to any country.. Instead, copyright and patents (intellectual property) are and should be in the public domain (but the scum that write the laws have created from thin air; rights which do not exist, and given the rights they fabricated to their feudal lords and the corporations owned by such lords. So the lawmaking scum have made it possible for a few (feudal lords) to establish and maintain a monopoly in the good life, over the masses in the world. .. Just as in the in England, France and Switzerland, where only the rich, corrupt politicians, and criminal few hung out and traded copyright and patent monopolies in the coffee houses, (much like stocks and bonds are traded today, monopoly trading was a game between fat cats (today's the fat cats are wall street barons), ..monopolies allow rich and wealth to support their royal life styles at the price of enslaving the masses to poverty. Luckily a court in England, threaten by an angry crowd of the masses, denied the wealthy their perpetual lifetime patents and copyright demands, no longer could the fat cats squeeze ownership of an intellectual creation from its creator, convert it to intangible property, and use the intellectual property to monopolize the world.

The British court said, no patent, no copyright and no monopoly can last longer than 7 years. that was 1787-89, and it explains the for a short time clause in the USA constitution.

frances , May 17, 2019 6:42:04 PM | link
I don't think the US sees the world's nations as commanded by their senior politician. Far from it, but to keep the US public locked in a child's mentality, the govt and its MSM present every political event/action/reaction as between personalities. Can't have reason and logic breaking out among the minions can we?

As for Trump being in charge, I rather doubt it, no US president has been "in charge" of any thing except possibly what is for lunch since Washington. Too many policies Trump began, such as negotiations with NK, have been trashed by his "teams" who I believe are actually his minders put in place by the Deep State.

Is Trump a great guy? A NY developer by their very nature is not a great guy. But I do think he wants to be seen as a great president. To do that he has to pull off some deals that will be remembered which is why he wanted the deal with NK, that Pompeo blew up.

I also think that the govt is preparing for the time when the dollar is no longer the reserve currency. And to do that you need to pull manufacturing back from abroad (from China), seize critical assets (from Venezuela),break any and all treaties that require you to spend money you won't have (making NATO (pay as you go).

All things the govt is doing, admittedly with the most horrific management team since Taft's. But they are moving on all fronts to circle the wagons of US commerce.

They know what is coming, some of them may see war as the way to bilk a few more trillions out of the treasury, but I don't think the military will let them. For they know that if they go up against a nation that Russia and China support and botch it, that R&C will go for the throat and that, more so than the currency crash would be the end of the US.

These moves we see are very serious because the end game is for the continued existence (or death)of the US. And many of these tactical moves are very high risk because they hasten the end of the dollar. I give the dollar five years more, tops. Then it will be just one in a basket of currencies until the yuan makes its way to the top.

And where that strange UN Agenda 21 fits in this I don't know, its plan for the US is for drastically reduced population (70% loss, from what?)the remaining population in mega cities and truly vast areas of no go set aside for the "environment." It reads like a National Parks program on crack with a side of Hunger Games.

The next five years are going to be really critical and I personally think the US will only make it by the skin of its teeth.

Peter AU 1 , May 17, 2019 6:54:13 PM | link
@ Jen. Another thought. The era in which the current state of America was conceived. British colonies in a war of separation or independence against the British. Europe and Britain at that time mostly ruled by hereditary monarchs nobles and lords ect.

Americans which I take it at that time would have been mostly British ancestry had done away with hereditary monarchs and so forth. It would have been somewhat exceptional at the time. In the targeting of the leader of a nation as the source of all evil, I wonder if that relates back to doing away with hereditary leadership especially monarch.

the grand chessboard. checkmate the king.

Don Bacon , May 17, 2019 6:55:25 PM | link
President Trump has declared a national emergency due a threat to the US from "the ability of foreign adversaries to create and exploit vulnerabilities in information and communications technology or services, with potentially catastrophic effects, and thereby constitutes an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States," so various actions and prohibitions have been stipulated here .
Lord H , May 17, 2019 7:07:00 PM | link
I particularly like this line: "where the propaganda weakens and journalism sneaks in"
jared , May 17, 2019 7:37:06 PM | link
UncleT

I dont mean to make excuses for Trump.
It all happens on his watch.

We will have other/better option soon - hopefully not too late.

Michael Droy , May 17, 2019 8:09:49 PM | link
I think war reporting rules are in place with China, and Trade war has started. Every month that passes without a crisis is a success for China right now as it over takes US in GDP, tech, and trade links.

Key issues are bringing Europe in - the Huawei ban extended to Europe is battlefield #1, Northstream (gas link to Russia) is #2.

First get Europe on board, the US can up things a lot further. If Trump gets this right, he can delay outright defeat by China under well beyond his 8 years are up. (Bush or Obama early on could have won, or could have found a peaceful solution).

lysias , May 17, 2019 8:15:14 PM | link
A president doesn't have to obey the orders of the powers that be just because they threaten to kill him otherwise. A brave president would defy them to do their worst. If they went ahead and killed him, he would still have accomplished something important. By exposing the nature of the system, he would have robbed it of its legitimacy and brought a revolution much closer.
Jackrabbit , May 17, 2019 8:32:10 PM | link
You've all been trained very well to ignore the class warfare. China's "peaceful rise" was convenient when it enriched the Western elite.

But when China makes a play for equal footing, the must be smacked down. In each case (rise, smack-down) ordinary people (like yourselves) get f*cked. Kissinger's NWO? It's for the children.... No, not YOUR children. Welcome to the rabbithole.

bevin , May 17, 2019 8:32:54 PM | link
vk@13

Best example of a country stealing foreign inventions and protecting its 'uneconomical' industries with tariffs is the USA. It was notorious that in the C19th American publishers pirated authors and musicians from Europe, particularly of course from Britain where the intellectual properties of Dickens and his contemporaries laid the basis for many an American publishing fortune.

Among the primary victims were American authors who couldn't compete against stolen imports.

dltravers , May 17, 2019 8:55:12 PM | link
I am not so sure the conclusions of the article are correct. Tariffs on Chinese factories will force production to other countries in the area like Vietnam where costs are not going to be much higher than China.

Granted, the US may be pissed off that Huawei is placing back doors in their systems but I suspect that they are only copying what the US has done for years with US companies like Microsoft.

My daughter managed 5 factories located in China of a clothing manufacture based in the US some years ago. She said there was constant chaos as the workers were continually on strike. Bad air, dangerous machines, poor wages. few bathrooms, bad water, childcare is chaining you child to a fence for the day, and the like. Her boss flew to China and asked for the cheapest costs possible. They showed him a factory full of little children cranking out production. He left crying his eyes out. He was a cold hearted bastard but even that was too much for him to see.

I viewed first hand the destruction trade agreements like NAFTA caused to good union wages and benefits in the US. Hell, that is what got Trump elected. It is tough to watch your children go into the same profession and make 50% less in wages and fringes 30 years later.

Intellectual property and patents? No so sure about that, the views here are new to me. I always supported them but I guess I need to dig deeper on that one.

In the net I think China is the loser, fewer jobs, higher food costs, their markets are down 30%, ours are peaking and are seen as a safe haven for money. Export numbers for China are dropping as is the trade balance.

At this point it is not a trade war but a re balancing of markets IMHO. If it was a real trade war things would be far worse. Middle supplier countries will be hurt, US farmers, some markets win some lose. If it was business as usual then it would be business as usual. Trump is stirring the pot and what the endgame is is anyone's guess. Did anyone really believe China would just bend over and accept any demands from the US?

All that being said China can easily wait it out and hope Trump loses and the policy is reversed which I am sure his policies will be reversed if anyone else gets elected.

Zachary Smith , May 17, 2019 9:19:41 PM | link
@ jared 4:47:32 PM #17

Your link about Boeing is a good one. Today at Naked Capitalism was a story about a possible 'payback' link between Huawei and Boeing. China has the option of causing a great deal of pain to both the US and Boeing in retaliation.

They could declare the recertified 737-MAX to be unsafe, so much so they're cancelling all orders and forbidding any landings in or overflights of China. If Canada hadn't screwed up so badly, the local Bombardier airplane might have been substituted for the 737. But Canada did goof in a major way.

Cyril , May 17, 2019 9:24:52 PM | link
@ponderer | May 17, 2019 4:27:02 PM | 15

There is no way that the US could subsidize the growth of a larger population base forever.

China sends vast amounts of manufactured goods to the United States; the US pays for all this with dollars it can effortlessly print. So who is subsidizing whom?

Cyril , May 17, 2019 9:26:38 PM | link
A minor thing compared to the trade war, but possibly of interest to sports fans.

The National Basketball Association (NBA) has been very popular in China, but its profitable Chinese operations may become a casualty of the trade war. Presumably it fears this: the NBA is looking to hire someone who can talk to the Chinese government :

The National Basketball Association Inc. is hiring its first head of government and public affairs in China as it seeks to protect its most important international market at a time of high tension in the U.S.-China relationship.
Jackrabbit , May 17, 2019 9:35:47 PM | link
What I don't like about Chas Freeman's article is his tone-deafness. He has been around government enough to know better. Smacking down China is a strategic priority for the Deep State. But Chas says:
There is no longer an orderly policy process in Washington to coordinate, moderate, or control policy formulation or implementation. Instead, a populist president has effectively declared open season on China.
It's a bit disturbing to see people here read Kissinger's 2014 Op-Ed (finally) but say nothing about Chas Freeman's assertion that it's all made up by a "populist" President.

<> <> <> <> <> <> <>

If the above hurt your feeling please feel free to retreat to your happy place. We'd all be better off.

Don Bacon , May 17, 2019 11:06:15 PM | link
Many trade war articles here
dltravers , May 17, 2019 11:13:06 PM | link
Jackrabbit at @ 58

Not happy, just learned to live with it. I think I get your point. The policy really means little, the underlying issues will never change.
Been in the rabbit hole for a really long time. If more people jump in maybe things will really start to change.

vk , May 18, 2019 12:01:02 AM | link
@ Posted by: dltravers | May 17, 2019 8:55:12 PM | 53
I am not so sure the conclusions of the article are correct. Tariffs on Chinese factories will force production to other countries in the area like Vietnam where costs are not going to be much higher than China.

First of all, this is not a new phenomenon: low wages, low technology industries are already being transferred to India and SE-Asia. The Chinese know this and there are innumerous articles on the internet you can find about it.

But even if this process accelerates, that won't solve the manufacturing problem of the USA: it will continue to be abroad. Besides, China's "competitive advantages" are too big for a confederation of micro-countries in the Pacific to overcome. It has a socialist economy (centrally planified economy, under the hegemony of the working class); it has 1.5 billion people that will only peak in 2030; it is decades ahead in built infrastructure; it has a huge scale economy advantage (e.g. infrastructure projects that are required to reach a certain desired productive level, which are profitable in China, may not be profitable in e.g. Malaysia simply because it is too small); its financial sector is not dominant over production. But then, I repeat: even if the USA nukes China, manufacturing still won't go back to American soil.

America's problem is a secular fall of its profit rates, not manufacturing capacity: it can import whatever and how much products it needs simply because it can print world money (Dollar system).

ben , May 18, 2019 12:18:53 AM | link
b said;" the U.S. economic system is based on greed and not on the welfare of its citizens." Bingo! Jrabbit @ 52 said;"US foreign policy has been remarkably consistent for over 20 years." Maybe the last 100 yrs.? Demonize countries people and rulers, and take their stuff, but why not? We are, don't ya' know, the exceptional nation, doing gods work. Manifest Destiny, isn't it great?
Zachary Smith , May 18, 2019 1:31:30 AM | link
I know next to nothing about the "Huawei" business, so a new article about it is something to grab at. Pretty cut and dried, huh? Hauwei is pure evil, and no 'ifs' or 'buts' about it.

But who is this guy. A couple of quick searches turned up some more of his output.

'It's now or never': The untold story of the dramatic, Canadian-led rescue of Syria's White Helmets

How Israel became a defender of the Syrian people

Just another neocon hack peddling BS, so I'm back to square one.

Ian , May 18, 2019 4:30:33 AM | link
dltravers | May 17, 2019 8:55:12 PM | 54:

China will wait it out until Trump is out of office. The Chinese leadership is pretty smart and had at least three years to prepare for the worst case scenario. Once Chinese industries as a whole follow Huawei's footsteps (i.e. Plan B), there will be no turning back. They'll set off Plan B once they see Trump winning 2020.

dh | May 18, 2019 12:06:33 AM | 67:

Ugh...I almost leap for joy until I read the URL.

padre , May 18, 2019 5:06:23 AM | link
Are we to asume from "Some aspects of China's trade behavior can and should be criticized" that the United States are shining example of trade (and all other) policies,all others to follow?
S , May 18, 2019 6:02:26 AM | link
@Indrid Cold #46:
For government and other high security uses China has options like the mips based Loongson but that wouldn't work in the commercial environment so hopelessly devoted to x86 and windows. Probably the best solution would be to make an x86 analog like amd markets, and it wouldn't take that long to do.

Chinese-Taiwanese joint venture Zhaoxin has been making x86 processors since 2013, based on VIA Technologies' x86 license. These processors are manufactured by Taiwanese TSMC, but may switch to Chinese SMIC once it launches its 14nm process later this year.

William Gruff , May 18, 2019 7:43:24 AM | link
"Whatever face is at the top is only representing the layers below." --b

The truth of this is also why so many in America hate Trump so much. He is too perfect a reflection of what America truly stands for. Trump accurately represents America, from America's bloated, over-inflated sense of self-importance and worth to America's pussy-grabbing foreign policy. Trump-hate is really self-hate.

Delusional American Russiagater Trump Derangement Syndrome victims will protest, but such people are incapable of taking a good hard look at themselves.

Hmm... "delusional" and "American" are redundant adjectives here. I should be more careful with my writing style.

snake , May 18, 2019 7:55:24 AM | link
Mr. Gruff you have it almost correct, Americans and the USA are not one in the same and they never have been.
I still don't think you guys get it.. The 7 article constitution of the USA apportions the power to rule between two branches and separates the masses from their personal political powers and their human rights. Its result is not a democracy, but a few people rule republic. 100% of the authority to rule (operate and make decisions) is vested in one person (Art. II, rule and decide: President w/VP backup), subject only to the powers distributed to the two bodied legislative structure ( Art. I, pass law and raise money: 450 house+100 senate persons). Critical to understand => one person makes all decisions, and directs the day to day government. Article III thru VII defines the judiciary and clarifies various situations. (525 popularly elected + 2 electoral college appointed <=paid governors) vs. 350,000,000 powerless governed persons entitled only to 3 votes/voter [Senator(1), House members(2)] and allowed one vote/voter for each President(1) and VP(1) <=but both Art. II persons are appointed by the electoral college).

The USA is about delivering to the ownership of a very few, all of the assets, all of the power, and all of the services once possessed by the many. The demand for all of the possessions of the many, to be delivered to the few, has expanded over time from 13 colony America to earth and now space. No one but the few are entitled to anything and the USA and other governments are there to be sure of it. But how is 'total possession vested in the few' to be maintained? By rule of law!

But what law would transfer everyone's possessions into the ownership of a few? Ah, the laws of monopoly.. so rule of law, from thin air , generates=> monopoly powers and rights of ownership.. Examples of laws that bear monopoly powers and that transfer ownership rights are copyright laws, patent laws, as they convert monopoly powers that once the many shared (via governments) now belong to the few. The transfer is called privatization. Oil is controlled for the benefit of the private few by ownership laws and right to produce contracts. All in all the function of t he USA has been to make a few very wealthy at the expense of the many.

The trade issues, sanctions, wars, tariffs, race wars, oil wars, religious wars etc. are about which people are going to be the few. Until the form and function of governments are determined by the masses from the bottom, instead of by the few from the top, nothing will ever change. The masses will suffer or prosper according to which government is the winner.

therevolutionwas , May 18, 2019 8:08:39 AM | link
US factories moved to China because the US economy is based on greed?!! US government greed for the company's money maybe. US factories moved to China because it was cheaper to produce products there and then pay the expense to ship them all the way back. The US has one of the highest federal tax rates on earth, and add in high state taxes for an unacceptable situation. US fiat paper money is the base problem.
Mark2 , May 18, 2019 8:24:01 AM | link
William Gruff @ 72 & snake 71
I was just about to say the very same thing ! Delusions of grandeur ! And now major self-harm systems ! But are these degenerates above the law ? They are after all genocidal mass murder's! String um up I say or shall we fry um ?
Right now the brain dead American public are like something out of -- - - 'The invasion of the body snatchers ' film
Joanna , May 18, 2019 9:30:24 AM | link
@58, JackRabitt, Smacking down China is a strategic priority for the Deep State.

the first time I got some type of glimpse of the average American Mind on China, as it filtered down from "the deep state" to the more fearfully ill-informed quarters of society no doubt, was in the post 9/11 universe. The person or persons pushing the meme, may have been a bit confused by all the conspiracy theories about 9/11 unfolding at the time.

Anyway, Chinese troops he/she/they asserted readers were close to the Mexican border approaching, advancing swiftly.

In hindsight, maybe accidentally, although I doubt, Trump combines the elements of that narrative perfectly. And it is not my intention to argue right or wrong here. But apparently down at the border there is this "invasion" on the other hand there's also the Yellow Peril.

DontBelieveEitherPropaganda , May 18, 2019 9:58:41 AM | link
Well, the chinese system of power has always been the thoughest to understand for any outsider. It has been this way, but in the last years it seems the so called age of information has lead to erode the curtains of this complex mechanism. At least for those who want to look behind those curtains, and not use them to project their propaganda.. ;)

And it is a good sign that while Xi tired to establish himself in such a unique position of power like Mao, and openly tried to put himself into the historic succession of the old emperors (like Mao did too), that the will of the people and party still tips the scale of power. It means the chinese confucian tradition and its consequences for a ruler even today still matter. Even though they are anyway lost on someone who is not of Asian origin.

What to westerners look like a dictator, is of a different nature as one can even imagine with western eyes. Every ruler has to strive for balance, for harmony, which in turns makes hearing of the peoples popular will be a necessity.

Even though many Chinese say, they like any other people only strive for what they need most ;) (like harmony and compromise). Though many also say, that the chinese will always choose stability and security over freedom. And i guess that is what many from the western world dont get about China, and also about the Putinists. I say let them and every one else have their choice. Just like i say let the US do theirs, and reap what they seeded.

For those able to read German check out the Books of Peter Scholl-Latour on China. The most telling and authorative books from a journalist who has reported first had for over 60 years, and has always defended and honored his own perspective; While the western so called reporters were trapt in their professional delusion of pro-NATO propaganda, and while the SDS praised the culture revolution as a democratic means, when whole china was terrorized and millions slaugtherd.

Hard to walk that middle ground, while being attacked from ideological drones from both sides i guess..

Anyway, the neocons in the US believes it is now or never to defend the USA unique position as world power. They believe, that if they don't fight now, they will have lost. I say, they already have.

Short of pulling a Hitler on China, meaning a total annihilation of the Chinese people, there is nothing they can do. And even Bolton will have a hard time trying to push through a clear cut genocide ;)

We will see China rise. Those who feared of this will see that china will not be half as bad as thought, and those who gloirfy china and put them into a good (vs bad US) black-wide scheme will learn of the faults of the Chinese power and its projection (Like its own believe of supremacy, of racism (a reason why china in the cold war was pretty unsuccessful in Africa, where most knew who deeply racist Chinese treated their fellows as workers, guest students,..).

All in all, what we need is a true and functional global community of nations and people, where goverments truely work together to balance out the stronger world powers. And with the pressure of Chinas rise and its strugle with the US, we may finally have a better chance for this to at least partially succed. I hope.. ;) Or of course it nuclear winter time. We will see.

daffyDuct , May 18, 2019 10:30:54 AM | link
vk @ 13

China now, Japan in the 1980s - it's "deja vu all over again!"

"AFTER ITS DEFEAT in World War II, Japan was content to take foreign inventions -- the transistor, the laser, the videotape player -- and convert them into products that it could market around the world. Japan acquired much of its base of Western technology, most of it American, perfectly legally through licensing, careful study of scientific papers and patents, and imitation. But when the U.S. wasn't willing to share, some Japanese companies simply copied with little regard for patents and other intellectual property rights that the courts have only recently begun to define in many areas of high technology.

The U.S., confident of its technical superiority, ''sold out to the Japanese,'' says G. Steven Burrill, head of the high-technology consulting group at Arthur Young, a Big Eight accounting firm. ''We let them share our brain.''

Now, belatedly awake to the recognition that Japan has been eating their breakfast, lunch, dinner, and bedtime snack, American companies are stirring. IBM vs. Fujitsu over computer software, Honeywell vs. Minolta over automatic focusing, Corning Glass vs. Sumitomo Electric over fiber optics -- these are only the latest, best-publicized complaints that Japan has stolen American technology.

Even as those legal battles are fought out, the copycat cliche is becoming obsolete. A series of studies financed by the U.S. government since 1984 warn that Japan has caught up with the U.S. or passed it in the development of integrated circuits, fiber optics, computer hardware engineering, and advanced materials like polymers. It is pressing hard in some areas of biotechnology, and lags primarily in computer software.

Already there are signs that the Japanese, buoyed by their new prowess, have assumed the arrogance of the U.S. along with its technology."

"A MEASURE of Japan's progress can be found in the number of patent filings in the U.S., Japan's most important export market. ..."

"THE FACT that Americans now worry about their access to Japanese technology is an acknowledgment of Japan's new scientific competence. When the Japanese were known primarily as copycats, the flow of technology was essentially in one direction. It was also cheap. Aaron Gellman, president of a consulting firm, says that for years U.S. firms licensed technology to the Japanese without asking for a grant-back, the right to use any improvements they made. Says Gellman: ''This was very arrogant and implied that no one could improve on our technology.''"

"U.S. scientists and companies have failed to take advantage of opportunities to tap Japanese academic research. ''What's wrong here is pure laziness,'' says Martin Anderson, an analyst with the MAC Group, a consulting firm in Cambridge, Massachusetts."

http://archive.fortune.com/magazines/fortune/fortune_archive/1987/12/21/69996/index.htm

denk , May 18, 2019 10:39:59 AM | link
Trust the UnitedSnake to blame the Chinese for reneging on an agreement ! Fact is, Trump's team Add in last minute conditions that are totally unacceptable to China. Chinese commentators are fuming at the audacity of the demands. 'WTF, Do they think we'r their gawd damned 51st state ?'

Typical UnitedSnake's 'negotiation' tactics, designed to fail ! Thats how Clinton justity his bombing of ex Yugo, by blaming Belgrade for the breakdown of negotiation ,to justify its 78 days of aerial arsons against Yugo.

denk , May 18, 2019 10:49:38 AM | link
How the UnitedSnake destroyed Toshiba and took over its crown jewel chip tech,... Toshiba was severely punished for breaking fukus sanction on USSR, by selling state of art milling machine to the Soviets. the unitedsnake slapped a heavy fine, demanded the resignation of Toshiba CEO, imposed a ten years ban on Toshiba products, FORCED the Japs to share their latest chip tech with Merikkans. Toshiba never recovered from that disaster.
vk , May 18, 2019 10:52:22 AM | link
Time to discard any illusions about the US ,source: Global Times Published: 2019/5/17 22:49:35
JOHN CHUCKMAN , May 18, 2019 10:59:52 AM | link
An excellent summary of many aspects of a serious and deteriorating situation. In the end, China has a lot of brainpower to apply to situations like this.They are used to speaking and writing one of the world's most difficult languages. They are used to playing Go, one of the world's most difficult board games. And their national endowment of analytical skills immensely surpasses that of the United States.

They are said to have eight times as many students in math and science and engineering in their universities. Xi himself is very bright, having earned degrees in difficult subjects at demanding universities, and he is calm and very forward-thinking. Just consider that magnificent long-term Silk Road Project. When I think of Trump with his constant mock-heroic poses and foot-high signatures on every silly memo and his gang of noisy, pompous thugs in top appointments, I can't help thinking I know how this will turn out in the end.

vk , May 18, 2019 11:11:09 AM | link
China's yuan slide risks trolling Trump It's good to remember that would not be the first time. After the first round of tariffs, China devalued the Renminbi and it basically wiped out the tariffs . In fact, it didn't even need to devalue that much: 1 Renminbi is now US$ 0.14 -- just a little over the Government max upwards band of 1:7.
denk , May 18, 2019 11:24:04 AM | link
In 2013, the CEO of French hi tech co Alstom was arrested by FBI, while changing flight at New York. His 'crime', breaking MERIKKAN anti corruption
law by bribing govn officials in INDONESIA ! Such is the LONG arm of merikkan extra territorial jurisdiction, rings a bell ... Ms meng ?

Just like Toshiba, the French paid a very heavy price. The CEO went to jail, Allstom, the crown jewel of French industry, was FORCED to sell off its core business to its main rival, GE. !

What did Ian Fleming's fundamental law of probability says.... ONCE IS HAPPENSTENCE, TWIC IS COINCIDENCE...

Noirette , May 18, 2019 11:39:25 AM | link
US MegaCos. outsourced and 'globalised' with the blessing, nay encouragement! of the Pol. Class. Cheaper labor and lax environmental rules, in comparison with 'home' (US, W countries, etc.) is a mantra. That is of course good enough, and one can track, say, sh*t-clothes factories transiting from Bangladesh, to China, to Malaysia, to Mexico, etc.

Other motives, the first is lack of responsibility and involvement which allows domineering and rapacious behavior. Foreign co. implant can just leave, relocate, if whatever. A random /racist term/ exploited worker in the 3rd world is not voting in US elections.

Deadly industrial pollution is outsourced, and energy use etc. at home while not curtailed or significantly diminished is not as high as one might see under condition of the industries returning home - a sort of 'greener' environment can be touted.

The PTB simply cannot grasp why some US citizens, who live high on the hog, house, 2 cars, 3 kids, endless dirt cheap consumer goods, etc. produced by 'slaves' abroad, complain. If the 'stuff' was produced at home, it would cost much more, the pay would be going to 'low-level' US labor -- in a more closed economic circuit there would be more 'equality' as things stand today in the US - *not* claiming it's a general rule.

Trump had some confused? thoughts about turning the present situation around, and relocating industrial - some extractive - manufacturing - jobs back home, say 1960s, with decent pay, to ppl who would then vote for him.

The stumbling block is that profits to shareholders, oligarchs, chief CEO's, asset trippers, usurers, Mafia types, Banks and other Fin, and Politicians who in the US are highly paid lackeys, etc. is set to diminish, as 'the pie' can no longer be grown much to accomodate all these grifters. Due to energy constraints, disruption of climate change, etc.

denk , May 18, 2019 11:56:20 AM | link
Brit and Dutch spooks now concur with Trump the charlatan's claim of Huawei security risk ! Trust the Brits to doublecross the Chinese, after they've been given the huawei source codes to examine and declared it free of bugs. As for the Dutch , they seems to be the goto guys these days, whenever the 5liars need some loyal poodles to corroborate their B.S., cue the M17 'investigation'.

hehehehe

[May 18, 2019] Crack Pipe, IDs, And Badge Found In Hunter Biden Rental Car

May 18, 2019 | www.zerohedge.com

A used crack pipe, two DC driver's licenses, multiple credit cards, a Delaware Attorney General badge and a US Secret Service business card belonging to Hunter Biden were found in a rental car returned to an Arizona Hertz location in the middle of the night, days before the 2016 presidential election, according to Breitbart , which obtained an exclusive copy of the police report.


johnny two shoes , 42 seconds ago link

Reminds me of Bill Clintons medical records. They were sealed during his presidency... one reason was because he was sterile from youth and was shooting blanks (re: Chelsea Hubbell)...

Another reason was that he had burned out his nasal septum from snorting cocaine...

-that's why he talked in that whining, nasally voice.

"My brother's got a nose like a vacuum cleaner..."

- Rodger Clinton

https://m.youtube.com/watch?v=AfHzS8u6yGU

hmmmstrange , 7 minutes ago link

Russians!

Totally_Disillusioned , 10 minutes ago link

"used crack pipe, two DC driver's licenses, multiple credit cards, a Delaware Attorney General badge and a US Secret Service business card", Ukraine Prosecutor fired, $500,000 contract and board position all for a guy who has name recognition and NOTHING ELSE. When are the Dimwits going to wise up to their failed party leaders? BTW thought old sleepy Joe was a crack Dad raising those kids all by himself...well we're finding out what kind of crack Dad he was.

frankthecrank , 58 minutes ago link

Hard core coke users have been shoving it up their asses since the '70s. It burns through the thin skin and gets right into the blood stream. This was one of the main ways that AIDS spread through the "gay" community so fast. The colon lining was already raw from the coke.

sgt_doom , 58 minutes ago link

Remember, Hunter Biden's deceased brother was attorney general of Delaware.

He was that famous dood who publicly justified why a serious pedophile shouldn't serve any time in prison (a member of the duPont family who sexually assaulted his 2-year-old and 3-year-old children).

[May 18, 2019] Miracles of adaptation

May 18, 2019 | turcopolier.typepad.com

VietnamVet , 16 May 2019 at 03:33 PM

...China's retail sales are now greater than America's. Since the US declared an economic war, GM will have to drop Buick and Cadillac brands and market their cars in China as Chinese. But "Face" likely will make that ploy unsuccessful.

[May 17, 2019] Shareholder Capitalism, the Military, and the Beginning of the End for Boeing

Highly recommended!
Notable quotes:
"... Like many of its Wall Street counterparts, Boeing also used complexity as a mechanism to obfuscate and conceal activity that is incompetent, nefarious and/or harmful to not only the corporation itself but to society as a whole (instead of complexity being a benign byproduct of a move up the technology curve). ..."
"... The economists who built on Friedman's work, along with increasingly aggressive institutional investors, devised solutions to ensure the primacy of enhancing shareholder value, via the advocacy of hostile takeovers, the promotion of massive stock buybacks or repurchases (which increased the stock value), higher dividend payouts and, most importantly, the introduction of stock-based pay for top executives in order to align their interests to those of the shareholders. These ideas were influenced by the idea that corporate efficiency and profitability were impinged upon by archaic regulation and unionization, which, according to the theory, precluded the ability to compete globally. ..."
"... "Return on Net Assets" (RONA) forms a key part of the shareholder capitalism doctrine. ..."
"... If the choice is between putting a million bucks into new factory machinery or returning it to shareholders, say, via dividend payments, the latter is the optimal way to go because in theory it means higher net returns accruing to the shareholders (as the "owners" of the company), implicitly assuming that they can make better use of that money than the company itself can. ..."
"... It is an absurd conceit to believe that a dilettante portfolio manager is in a better position than an aviation engineer to gauge whether corporate investment in fixed assets will generate productivity gains well north of the expected return for the cash distributed to the shareholders. But such is the perverse fantasy embedded in the myth of shareholder capitalism ..."
"... When real engineering clashes with financial engineering, the damage takes the form of a geographically disparate and demoralized workforce: The factory-floor denominator goes down. Workers' wages are depressed, testing and quality assurance are curtailed. ..."
May 17, 2019 | www.nakedcapitalism.com

The fall of the Berlin Wall and the corresponding end of the Soviet Empire gave the fullest impetus imaginable to the forces of globalized capitalism, and correspondingly unfettered access to the world's cheapest labor. What was not to like about that? It afforded multinational corporations vastly expanded opportunities to fatten their profit margins and increase the bottom line with seemingly no risk posed to their business model.

Or so it appeared. In 2000, aerospace engineer L.J. Hart-Smith's remarkable paper, sardonically titled "Out-Sourced Profits – The Cornerstone of Successful Subcontracting," laid out the case against several business practices of Hart-Smith's previous employer, McDonnell Douglas, which had incautiously ridden the wave of outsourcing when it merged with the author's new employer, Boeing. Hart-Smith's intention in telling his story was a cautionary one for the newly combined Boeing, lest it follow its then recent acquisition down the same disastrous path.

Of the manifold points and issues identified by Hart-Smith, there is one that stands out as the most compelling in terms of understanding the current crisis enveloping Boeing: The embrace of the metric "Return on Net Assets" (RONA). When combined with the relentless pursuit of cost reduction (via offshoring), RONA taken to the extreme can undermine overall safety standards.

Related to this problem is the intentional and unnecessary use of complexity as an instrument of propaganda. Like many of its Wall Street counterparts, Boeing also used complexity as a mechanism to obfuscate and conceal activity that is incompetent, nefarious and/or harmful to not only the corporation itself but to society as a whole (instead of complexity being a benign byproduct of a move up the technology curve).

All of these pernicious concepts are branches of the same poisoned tree: " shareholder capitalism ":

[A] notion best epitomized by Milton Friedman that the only social responsibility of a corporation is to increase its profits, laying the groundwork for the idea that shareholders, being the owners and the main risk-bearing participants, ought therefore to receive the biggest rewards. Profits therefore should be generated first and foremost with a view toward maximizing the interests of shareholders, not the executives or managers who (according to the theory) were spending too much of their time, and the shareholders' money, worrying about employees, customers, and the community at large. The economists who built on Friedman's work, along with increasingly aggressive institutional investors, devised solutions to ensure the primacy of enhancing shareholder value, via the advocacy of hostile takeovers, the promotion of massive stock buybacks or repurchases (which increased the stock value), higher dividend payouts and, most importantly, the introduction of stock-based pay for top executives in order to align their interests to those of the shareholders. These ideas were influenced by the idea that corporate efficiency and profitability were impinged upon by archaic regulation and unionization, which, according to the theory, precluded the ability to compete globally.

"Return on Net Assets" (RONA) forms a key part of the shareholder capitalism doctrine. In essence, it means maximizing the returns of those dollars deployed in the operation of the business. Applied to a corporation, it comes down to this: If the choice is between putting a million bucks into new factory machinery or returning it to shareholders, say, via dividend payments, the latter is the optimal way to go because in theory it means higher net returns accruing to the shareholders (as the "owners" of the company), implicitly assuming that they can make better use of that money than the company itself can.

It is an absurd conceit to believe that a dilettante portfolio manager is in a better position than an aviation engineer to gauge whether corporate investment in fixed assets will generate productivity gains well north of the expected return for the cash distributed to the shareholders. But such is the perverse fantasy embedded in the myth of shareholder capitalism.

Engineering reality, however, is far more complicated than what is outlined in university MBA textbooks. For corporations like McDonnell Douglas, for example, RONA was used not as a way to prioritize new investment in the corporation but rather to justify disinvestment in the corporation. This disinvestment ultimately degraded the company's underlying profitability and the quality of its planes (which is one of the reasons the Pentagon helped to broker the merger with Boeing; in another perverse echo of the 2008 financial disaster, it was a politically engineered bailout).

RONA in Practice

When real engineering clashes with financial engineering, the damage takes the form of a geographically disparate and demoralized workforce: The factory-floor denominator goes down. Workers' wages are depressed, testing and quality assurance are curtailed. Productivity is diminished, even as labor-saving technologies are introduced. Precision machinery is sold off and replaced by inferior, but cheaper, machines. Engineering quality deteriorates. And the upshot is that a reliable plane like Boeing's 737, which had been a tried and true money-spinner with an impressive safety record since 1967, becomes a high-tech death trap.

The drive toward efficiency is translated into a drive to do more with less. Get more out of workers while paying them less. Make more parts with fewer machines. Outsourcing is viewed as a way to release capital by transferring investment from skilled domestic human capital to offshore entities not imbued with the same talents, corporate culture and dedication to quality. The benefits to the bottom line are temporary; the long-term pathologies become embedded as the company's market share begins to shrink, as the airlines search for less shoddy alternatives.

You must do one more thing if you are a Boeing director: you must erect barriers to bad news, because there is nothing that bursts a magic bubble faster than reality, particularly if it's bad reality.

The illusion that Boeing sought to perpetuate was that it continued to produce the same thing it had produced for decades: namely, a safe, reliable, quality airplane. But it was doing so with a production apparatus that was stripped, for cost reasons, of many of the means necessary to make good aircraft. So while the wine still came in a bottle signifying Premier Cru quality, and still carried the same price, someone had poured out the contents and replaced them with cheap plonk.

And that has become remarkably easy to do in aviation. Because Boeing is no longer subject to proper independent regulatory scrutiny. This is what happens when you're allowed to " self-certify" your own airplane , as the Washington Post described: "One Boeing engineer would conduct a test of a particular system on the Max 8, while another Boeing engineer would act as the FAA's representative, signing on behalf of the U.S. government that the technology complied with federal safety regulations."

This is a recipe for disaster. Boeing relentlessly cut costs, it outsourced across the globe to workforces that knew nothing about aviation or aviation's safety culture. It sent things everywhere on one criteria and one criteria only: lower the denominator. Make it the same, but cheaper. And then self-certify the plane, so that nobody, including the FAA, was ever the wiser.

Boeing also greased the wheels in Washington to ensure the continuation of this convenient state of regulatory affairs for the company. According to OpenSecrets.org , Boeing and its affiliates spent $15,120,000 in lobbying expenses in 2018, after spending, $16,740,000 in 2017 (along with a further $4,551,078 in 2018 political contributions, which placed the company 82nd out of a total of 19,087 contributors). Looking back at these figures over the past four elections (congressional and presidential) since 2012, these numbers represent fairly typical spending sums for the company.

But clever financial engineering, extensive political lobbying and self-certification can't perpetually hold back the effects of shoddy engineering. One of the sad byproducts of the FAA's acquiescence to "self-certification" is how many things fall through the cracks so easily.

[May 17, 2019] Bob Goldstone letter

Looks like a clear attempt to entrup Trump Jr
May 17, 2019 | www.zerohedge.com

On Jun 3, 2016, at 10:36 AM, Rob Goldstone wrote:

Good morning

Emin just called and asked me to contact you with something very interesting.

The Crown prosecutor of Russia met with his father Aras this morning and in their meeting offered to provide the Trump campaign with some official documents and information that would incriminate Hillary and her dealings with Russia and would be very useful to your father.

This is obviously very high level and sensitive information but is part of Russia and its government's support for Mr. Trump - helped along by Aras and Emin.

What do you think is the best way to handle this information and would you be able to speak to Emin about it directly?

I can also send this info to your father via Rhona, but it is ultra sensitive so wanted to send to you first.

Best

Rob Goldstone

On Jun 3, 2016, at 10:53, Donald Trump Jr. wrote:

Thanks Rob I appreciate that. I am on the road at the moment but perhaps I just speak to Emin first. Seems we have some time and if it's what you say I love it especially later in the summer. Could we do a call first thing next week when I am back?

Best,

Don

[May 17, 2019] Nothing goes together better then an attorney general badge and a used crack pipe

May 17, 2019 | www.zerohedge.com

A used crack pipe, two DC driver's licenses, multiple credit cards, a Delaware Attorney General badge and a US Secret Service business card belonging to Hunter Biden were found in a rental car returned to an Arizona Hertz location in the middle of the night, days before the 2016 presidential election, according to Breitbart , which obtained an exclusive copy of the police report.

[May 17, 2019] Gregory Travis and Marshall Auerback: Anatomy of a Disaster – Why Boeing Should Never Make Another Airplane, Again

May 17, 2019 | www.nakedcapitalism.com

Yves here. Even thought this critique of Boeing might seem a bit .bloodthirsty Boeing does have blood on its hands and has been astonishingly unrepentant about it.

Given the fact that Boeing is part of a duopoly of makers of large planes, and there is no plausible way that Airbus could take up the new orders slack, predictions of its demise would seem to be premature. But AIG was widely viewed as indomitable until it started its nosedive.

Another way to return Boeing to the community of adequately-behaved major corporations would be a housecleaning of its executive ranks, starting the the CEO, and the board, along with board reforms such as the creation of a safety subcommittee with clout. But the odds of anything like that happening look remote.

Why might Boeing be at much greater risk of serious trouble than it now appears? Huawei. China likely perceives that the US is engaging in hostage-taking, both close to literally with the extradition request for the CEO's daughter, Meng Wanzhou, and the Trump Administration moving towards a blacklisting yesterday. From the Financial Times :

The White House and US Department of Commerce took steps on Wednesday night that would in effect ban Huawei from selling technology into the American market, and could also prevent it from buying semiconductors from suppliers including Qualcomm in the US that are crucial for its production .

The US Department of Commerce said it would put Huawei on its so-called Entity List, meaning that the American companies will have to obtain a licence from the US government to sell technology to Huawei. At the same time, US president Donald Trump signed an executive order declaring the US telecoms sector faced a "national emergency" -- giving the commerce department the power to "prohibit transactions posing an unacceptable risk" to national security .

Paul Triolo, a technology policy expert at Eurasia Group, a risk consultancy, said it was a "huge development" that would not only hurt the Chinese company but also have an impact on global supply chains involving US companies such as Intel, Microsoft and Oracle.

"The US has basically openly declared it is willing to engage in a full-fledged technology war with China," he said.

Huawei has few alternatives for critical semiconductors to Qualcomm, which would likely be denied an export license if the US follows through on its threat of putting Huawei on the "Entity List" (the second most stringent category, but still sufficient for the US to bar licensing). One is Murata, but Japan has joined the US ban on Huawei 5G products, and would presumably fall in line if the US were to ask Japan to tell Murata not to sell semiconductors to Huawei.

The advantages of China going after Boeing, as opposed to making life miserable for US technology companies, would be considerable. Targeting, say, Microsoft would be an obvious tit for tat. By contrast, China was the first country to ground the 737 Max, and its judgement was confirmed by other airline regulators and eventually the FAA. China does not have a credible competitor to Boeing, so it could wrap continued denial of certification of the 737 Max in the mantle of being pro-safety, even if independent parties suspected this was a secondary motive.

On top of that, Ethiopian Air's forceful criticism of the 737 Max gives China air cover. Unlike Lion Air, which is widely seen as a questionable operator, readers who fly emerging economy carriers give Ethiopian Air high marks for competence and safety. One even wrote, "I have flown Ethiopian Air. It's certainly far better than Irish-owned and operated Ryan Airlines (even though the latter has white pilots with nice Irish accents)."

Chinese interests have made large investments many countries in Africa, so it's conceivable it could get other countries on the continent to follow its lead. Admittedly, China plus those countries collectively may not be large enough to do considerable damage to Boeing. But this action would break the hegemony of the FAA as certifier for US manufacturers, and that could prove crippling in the long run.

Another issue that hasn't gotten the attention it warrants is that Boeing appears to lack the stringent software development protocols necessary for "fly by wire" operations. Boeing historically has relied on pilots being able to reassert control over automated functions'; Airbus has "fly by wire" systems as far more prominent and accordingly the expectation and ability of pilots to override these systems is lower.

However, many articles noted that MCAS took the 737 further into a fly-by-wire philosophy than it had been before. Yet Boeing was astonishingly lax, having only two angle of attack sensors, of which only one would be providing input to MCAS, and then on an arbitrary-seeming basis.

By contrast, the Airbus philosophy stresses redundancy, not only in hardware -- they use not three but four angle of attack sensors -- but in software, and even software development. "Two or more independent flight control computing systems are installed using different types of microprocessors and software written in different languages by different development teams" and verified using formal methods (" Approaches to Assure Safety in Fly-By-Wire Systems: Airbus Vs. Boeing ").

By Gregory Travis, a writer, a software executive, a pilot, and an aircraft owner who has logged more than 2,000 hours of flying time, ranging from gliders to a Boeing 757 (as a full-motion simulator) and Marshall Auerback, a market analyst and commentator. Produced by Economy for All , a project of the Independent Media Institute

"If we fly [the Boeing 737] again, we'll be the last airline to fly them again," said Tewolde Gebremariam, CEO of Ethiopian Airlines.

Almost immediately after the takeoff of Ethiopian Airlines Flight 302 on March 10, the first signs of trouble appeared . The Boeing 737's two angle of attack indicators, one on either side of the aircraft, gave inconsistent readings. The left indicator suddenly recorded a dangerous angle of attack of 36 degrees, while the right one showed a benign 11 degrees.

In response to the angle of attack from the left side, the stick shaker on the captain's side (left) activated. The stick shaker vibrated the pilot's control column to warn of an impending stall. The co-pilot's column, however, did not vibrate as it was activated from the right-side angle of attack sensor. This was the first indication to the pilots that the angle of attack sensors disagreed with one another.

In less than a second, after going from 36 degrees, the pilot's left-hand angle of attack (AOA) sensor suddenly jumped to 75 degrees of angle of attack. If it were actually true that the aircraft pitched up that rapidly, the airframe would have broken apart.

It was not true, however. The sensor was faulty. Yet the Maneuvering Characteristics Augmentation System (MCAS) computer software did not disregard this obviously incorrect reading.

Six seconds later, the heater on the left-hand side AOA sensor changed state. Angle of attack sensors are particularly susceptible to malfunction when water from rain or a recent airplane washing gets into their guts. To prevent this, they are fitted with ice-melting heaters.

Two minutes after takeoff, the captain called for the airplane's flaps to be retracted. Because the 737's MCAS function does not activate until the flaps are retracted, the captain has unconsciously summoned his, and his passengers', executioner.

Two minutes and 15 seconds after takeoff had passed. Because it was only reading the faulty left-hand AOA sensor and because that sensor was indicating a dangerous stall, the MCAS software activated for 10 seconds -- spinning the trim wheels 46 revolutions -- and pushed the 737's nose toward the ground.

Ten seconds later, the pilots disabled MCAS by throwing the cutout switches. Next, they attempted to "roll back" those 46 revolutions manually but found that the aerodynamic forces were so great that the trim wheels could not be moved back by hand. Meanwhile, the captain asked his first officer to help him hold the control column back as the nose-down force commanded by MCAS was overwhelming his strength.

In desperation, they turned the trim cutoff switch back "on" so that they could use the electric motor to turn the trim wheel, which they could not move by hand. They were successful for a moment at un-winding it, but MCAS rapidly reactivated and drove the trim back nose-down. The trim wheels were rotating nearly 300 RPM, in the wrong direction, under MCAS command.

The pilots were helpless. The trim reached its nose-down stop, and the control column force necessary to keep the plane level overwhelmed the pilots. The plane eventually plunged into the ground at a 40-degree angle while traveling nearly 600 miles per hour , killing everybody on board.

This mishap is one of the most tragic illustrations of Boeing's decline. It boggles the mind to consider how these issues escaped regulatory review and how the aircraft were deemed airworthy. This could only happen in an industry afflicted by a wholesale collapse of regulation and oversight.

Is the Boeing company even capable of building safe commercial airliners any longer? And should we expect to see the fatally flawed 737 MAX 8 return to service? In regard to the latter, no less than the CEO of Ethiopian Airlines has just said no. The evidence seems to indicate that public-sector regulatory oversight is incapable of reviewing manufacturers' designs and ascertaining their airworthiness.

In short, it looks like the system has collapsed.

Shareholder Capitalism, the Military, and the Beginning of the End for Boeing

The fall of the Berlin Wall and the corresponding end of the Soviet Empire gave the fullest impetus imaginable to the forces of globalized capitalism, and correspondingly unfettered access to the world's cheapest labor. What was not to like about that? It afforded multinational corporations vastly expanded opportunities to fatten their profit margins and increase the bottom line with seemingly no risk posed to their business model.

Or so it appeared. In 2000, aerospace engineer L.J. Hart-Smith's remarkable paper, sardonically titled "Out-Sourced Profits – The Cornerstone of Successful Subcontracting," laid out the case against several business practices of Hart-Smith's previous employer, McDonnell Douglas, which had incautiously ridden the wave of outsourcing when it merged with the author's new employer, Boeing. Hart-Smith's intention in telling his story was a cautionary one for the newly combined Boeing, lest it follow its then recent acquisition down the same disastrous path.

Of the manifold points and issues identified by Hart-Smith, there is one that stands out as the most compelling in terms of understanding the current crisis enveloping Boeing: The embrace of the metric "Return on Net Assets" (RONA). When combined with the relentless pursuit of cost reduction (via offshoring), RONA taken to the extreme can undermine overall safety standards.

Related to this problem is the intentional and unnecessary use of complexity as an instrument of propaganda. Like many of its Wall Street counterparts, Boeing also used complexity as a mechanism to obfuscate and conceal activity that is incompetent, nefarious and/or harmful to not only the corporation itself but to society as a whole (instead of complexity being a benign byproduct of a move up the technology curve).

All of these pernicious concepts are branches of the same poisoned tree: " shareholder capitalism ":

[A] notion best epitomized by Milton Friedman that the only social responsibility of a corporation is to increase its profits, laying the groundwork for the idea that shareholders, being the owners and the main risk-bearing participants, ought therefore to receive the biggest rewards. Profits therefore should be generated first and foremost with a view toward maximizing the interests of shareholders, not the executives or managers who (according to the theory) were spending too much of their time, and the shareholders' money, worrying about employees, customers, and the community at large. The economists who built on Friedman's work, along with increasingly aggressive institutional investors, devised solutions to ensure the primacy of enhancing shareholder value, via the advocacy of hostile takeovers, the promotion of massive stock buybacks or repurchases (which increased the stock value), higher dividend payouts and, most importantly, the introduction of stock-based pay for top executives in order to align their interests to those of the shareholders. These ideas were influenced by the idea that corporate efficiency and profitability were impinged upon by archaic regulation and unionization, which, according to the theory, precluded the ability to compete globally.

"Return on Net Assets" (RONA) forms a key part of the shareholder capitalism doctrine. In essence, it means maximizing the returns of those dollars deployed in the operation of the business. Applied to a corporation, it comes down to this: If the choice is between putting a million bucks into new factory machinery or returning it to shareholders, say, via dividend payments, the latter is the optimal way to go because in theory it means higher net returns accruing to the shareholders (as the "owners" of the company), implicitly assuming that they can make better use of that money than the company itself can. It is an absurd conceit to believe that a dilettante portfolio manager is in a better position than an aviation engineer to gauge whether corporate investment in fixed assets will generate productivity gains well north of the expected return for the cash distributed to the shareholders. But such is the perverse fantasy embedded in the myth of shareholder capitalism.

Engineering reality, however, is far more complicated than what is outlined in university MBA textbooks. For corporations like McDonnell Douglas, for example, RONA was used not as a way to prioritize new investment in the corporation but rather to justify disinvestment in the corporation. This disinvestment ultimately degraded the company's underlying profitability and the quality of its planes (which is one of the reasons the Pentagon helped to broker the merger with Boeing; in another perverse echo of the 2008 financial disaster, it was a politically engineered bailout).

RONA in Practice

When real engineering clashes with financial engineering, the damage takes the form of a geographically disparate and demoralized workforce: The factory-floor denominator goes down. Workers' wages are depressed, testing and quality assurance are curtailed. Productivity is diminished, even as labor-saving technologies are introduced. Precision machinery is sold off and replaced by inferior, but cheaper, machines. Engineering quality deteriorates. And the upshot is that a reliable plane like Boeing's 737, which had been a tried and true money-spinner with an impressive safety record since 1967, becomes a high-tech death trap.

The drive toward efficiency is translated into a drive to do more with less. Get more out of workers while paying them less. Make more parts with fewer machines. Outsourcing is viewed as a way to release capital by transferring investment from skilled domestic human capital to offshore entities not imbued with the same talents, corporate culture and dedication to quality. The benefits to the bottom line are temporary; the long-term pathologies become embedded as the company's market share begins to shrink, as the airlines search for less shoddy alternatives.

You must do one more thing if you are a Boeing director: you must erect barriers to bad news, because there is nothing that bursts a magic bubble faster than reality, particularly if it's bad reality.

The illusion that Boeing sought to perpetuate was that it continued to produce the same thing it had produced for decades: namely, a safe, reliable, quality airplane. But it was doing so with a production apparatus that was stripped, for cost reasons, of many of the means necessary to make good aircraft. So while the wine still came in a bottle signifying Premier Cru quality, and still carried the same price, someone had poured out the contents and replaced them with cheap plonk.

And that has become remarkably easy to do in aviation. Because Boeing is no longer subject to proper independent regulatory scrutiny. This is what happens when you're allowed to " self-certify" your own airplane , as the Washington Post described: "One Boeing engineer would conduct a test of a particular system on the Max 8, while another Boeing engineer would act as the FAA's representative, signing on behalf of the U.S. government that the technology complied with federal safety regulations."

This is a recipe for disaster. Boeing relentlessly cut costs, it outsourced across the globe to workforces that knew nothing about aviation or aviation's safety culture. It sent things everywhere on one criteria and one criteria only: lower the denominator. Make it the same, but cheaper. And then self-certify the plane, so that nobody, including the FAA, was ever the wiser.

Boeing also greased the wheels in Washington to ensure the continuation of this convenient state of regulatory affairs for the company. According to OpenSecrets.org , Boeing and its affiliates spent $15,120,000 in lobbying expenses in 2018, after spending, $16,740,000 in 2017 (along with a further $4,551,078 in 2018 political contributions, which placed the company 82nd out of a total of 19,087 contributors). Looking back at these figures over the past four elections (congressional and presidential) since 2012, these numbers represent fairly typical spending sums for the company.

But clever financial engineering, extensive political lobbying and self-certification can't perpetually hold back the effects of shoddy engineering. One of the sad byproducts of the FAA's acquiescence to "self-certification" is how many things fall through the cracks so easily.

AOA: A Recipe for Disaster

You can see this problem in regard to the AOA sensors in the Boeing 737 aircraft. Historically, these sensors have not been a particularly important metric in regard to commercial flying done by human pilots. Boeing neither put much effort into the AOA system, nor was it regarded as a particularly crucial safety consideration. This is why taking off with inoperative AOA heaters on a Boeing airplane like the 737 was never a big deal -- the worst consequence would be an annoying activation of the stick shaker when it was clear the activation was erroneous.

However, AOA sensors become very important in computer-controlled ("fly by wire") aircraft, which is why the A320 has three AOA sensors and why having heaters working on two of the three is an airworthiness requirement.

When Boeing put MCAS on the new Max 8 737, it did make the AOA sensor a first-line flight-critical item. But it never went back and revised the Master Minimum Equipment List (MMEL) to reflect the AOA system's new importance. And this didn't get caught by the FAA because, as noted earlier, they were allowing Boeing to self-certify under the new rules. There wasn't an independent set of eyes to catch the oversight.

The Cost of Building a Safe Airplane

Since these decisions were largely governed by bottom line considerations , what would it take to quantify the financial implications to Boeing of fielding a "good" 737 MAX? "Good" here means a version of the 737 plane that actually addressed the problems of the current MAX 8 model, whose aerodynamic instability led Boeing to the MCAS software Band-Aid "fix" (a software "solution" that supposedly addressed the problems thrown up by the engine's modifications, but which in reality led to the tragic crashes in Indonesia and Africa).

Making a good 737 MAX would have involved three things:

Fundamental changes to the 737 airframe to raise its height to fit the larger engines. A new aircraft type certificate, reflecting and acknowledging the changes. Costs of training pilots for what is, essentially, a new aircraft.

Let's estimate the total cost of a-c, above, as $5 billion. That's $5 billion more to make a "good" 737 MAX vs. the current "bad" 737 MAX.

These calculations reveal that, deploying the shortcuts that Boeing actually adopted, the "bad" 737 design yielded Boeing a profit margin of 21 percent per aircraft sold. By contrast, a "good" design, which properly incorporated better safety features, yielded a profit of 19 percent per aircraft. (At least according to our calculations.)

That doesn't sound like that much of a decrease. In fact, a 19 percent profit margin, per airplane, sounds pretty good -- especially for an aircraft that no longer has a greater-than-average propensity to dive for the dirt.

But it represents a 2 percent reduction in profit margins. When you evaluate that against the fact that the 737 program accounts for nearly half of all of Boeing's profits and that the wizards astride the corporation have told Wall Street that they can conjure 1 percent to 1.5 percent annual profit increases, company-wide, the actions undertaken by Boeing's senior management begin to make sense.

Boeing's MCAS wizardry, to cast a spell upon the 737 MAX's aerodynamic instability, then, bears all the forensic fingerprints of a panic. It was a cheap financial fix designed to safeguard a 21 percent profit margin. This despite the fact that designing the 737 properly would still have yielded substantial profits. True, Boeing wouldn't have met its profit forecasts, which may have affected the stock price. But we would have avoided a situation whereby Boeing played the equivalent of Russian roulette with the airlines and, by extension, the passengers on those planes.

And here's the likely fallout from this putrid exercise in greed: Boeing is probably done as a credible manufacturing concern. Its credibility has been shattered as the company has repeatedly failed to get out in front of the problem and even today keeps finding itself reacting to yet more damaging disclosures.

It's somewhat difficult to impute motives, but Boeing's upper management arrogantly seems to be making an implicit assumption that it can overcome this problem, on the basis that the flying public has very few alternatives to its increasingly flawed products. That may be true in the immediate short term, but surely Airbus and future competitors out of Asia are licking their proverbial chops thanks to the magnitude of the incompetence displayed here by Boeing.

Ironically, Boeing's increasing resort to offshoring is foaming the runway (pun intended) for its future competitors. For some time now, the company has been engaged in instructing its future competition on how to build commercial airliners. The Chinese have been gobbling up U.S. aviation capacity, everything from Teledyne Continental Motors to Cirrus aircraft, at a breakneck pace. And, like a play out of Hart-Smith's paper on what not to do, Boeing has been teaching the Chinese, in China, how to build commercial airliners.

For students of history, the irony of the capitalists having actually sold the communists the rope with which to hang themselves is, frankly, too much to bear. But the Chinese, like the Airbus consortium, can afford to take a long-term strategic view that a company captured by the disease of shareholder capitalism like Boeing clearly cannot. In China, the planes will be built domestically, and will not be subject to the arbitrary dictates of private portfolio managers; they will not be constrained by strategies that seem largely to be focused on meeting (or beating) an arbitrary quarterly earnings per share figure.

Boeing has no inherent capacity to plan for the future nor is the company's leadership compensated for their strategic vision. Their executives are tactically compensated on the basis of the annual gyrations of the stock price, which constrains the ability to take the long-term risks and investment, much less evince concerns about engineering and safety that are a unique requirement of airliner building. They should be worried more about facing manslaughter charges. The negligence has become even worse since the 2005 regulatory reform that handed all inspection and certification of Boeing's airplanes over to Boeing itself. It was not hard to predict the sad outcome of that denouement: a failed 787 Dreamliner program and, now, a 737 MAX 8 plane with nothing to show but bodies strewn across the desert and beneath the sea.


PlutoniumKun , May 17, 2019 at 5:14 am

Just a point on alternatives to Boeing – there is one alternative 'type' that airlines can choose, and can make sense when oil prices are low – that's to keep older aircraft in the air longer. Most airliners are still fully airworthy and have plenty of air miles in them when they are retired – the reason for retiring and replacing them is that the annualised costs of a new aircraft are usually lower. Even independently of this crash, a number of airlines over the past few years, notably, Ryanair, have slowed down their replacement rate – I'm not sure the reason, although I would guess its that low fuel prices mean the most efficient new models don't pay for themselves on short haul routes.

So the supply bottleneck may not be as severe as everyone thinks, airlines may be willing to hold off for a few years until Airbus can step up or Sukhoi/Tupolev/Mitsubishi/Embraer or Comac start producing competitive products (although I must admit I'd be very worried about flying any of those aircraft if political pressure is on the manufacturers to rush into production, this is precisely what seems to have screwed the Sukhoi Superjet).

I think Yves is quite right that Boeing is a nice fat target for the Chinese. Airbus has long links in China, much longer than Boeing, so could well be working behind the scenes to encourage this. And for the Chinese, the fact that hitting Boeing would also be a blow to the Japanese (who are major subcontractors to Boeing) would be the cherry on top of the cake. And it can't hurt the prospects of Comac either.

Just one point on this:

On top of that, Ethiopian Air's forceful criticism of the 737 Max gives China air cover. Unlike Lion Air, which is widely seen as a questionable operator, readers who fly emerging economy carriers give Ethiopian Air high marks for competence and safety. One even wrote, "I have flown Ethiopian Air. It's certainly far better than Irish-owned and operated Ryan Airlines (even though the latter has white pilots with nice Irish accents)."

Much as I loath Ryanair and everything they stand for (I refuse to use their flights, even when cheaper/faster than alternatives), they do have an impeccable safety record. In terms of service, you can't really compare a national carrier like Ethiopian Air to a budget short haul operator like Ryanair.

EVM , May 17, 2019 at 12:11 pm

Put this up in today "Link's", but seems more relevant here: "Ethiopian pilots raised safety concerns years before fatal crash, records show"

JDM , May 17, 2019 at 12:56 pm

Interesting article. This part was eye-opening:

One pilot accused the airline of employing flight simulator trainers that are not knowledgeable about "aircraft systems, Boeing procedures, or company procedures," and failing to follow a syllabus for a pilot training course.

"Across the board, 737, 767 [and] 777 [flight simulator] instructors not knowledgeable about the aircraft's systems, Boeing procedures, or company procedures," the pilot alleged in the complaint. "Overall, [Ethiopian Airlines] offers substandard training compared to industry norms," the pilot wrote.

The pilot also criticized Ethiopian Airlines' coordination on specific flights, calling its dispatch office "a disgrace" and taking the airline to task for apparent safety oversights.

"Crews never get accurate flight plans, fuel loads, latest weather or up to date information," the pilot alleged.

The pilot also noted that "non-normal checklists in the cockpit are not kept current, including complete omission of certain checklists," referring to documents that instruct pilots on how to respond to "non-normal" equipment behaviors that can become dangerous.

The pilot also harshly criticized the airline's management style, alleging that a pressure to meet deadlines sometimes led flight crews to overlook maintenance requirements.

"If a scheduled flight pushes back due to maintenance, mechanics are punished with a reduction in salary," the pilot wrote. "Leadership style of the company is fear based. This permeates all aspects of the operation and all departments. Nobody wants to be held accountable. Misunderstandings, conflicts, or errors are handled through punishment."

The pilot said the FAA should intervene. The agency regularly evaluates whether foreign countries meet U.S. standards for airline oversight, and has the authority to revoke authorizations given to specific countries.

"It's the duty and moral responsibility of ICAO, the FAA and JCAB to assure this airline is fully competent and compliant before allowing them to expand and continue their international operations," the pilot wrote. "The traveling public deserves much safer air transport. Essentially, [Ethiopian Airlines] doesn't have the infrastructure to support the giant influx of 787′s, A350′s, and 737Max's on order. Safety is being sacrificed for expansion and profit margin."

EVM , May 17, 2019 at 3:48 pm

Also found this one, plane crashed, 90 dead. Bit dated, but similarities are striking . Ethiopian 302 Accident Summary. A Boeing 737-8AS(WL) passenger jet, registered ET-ANB, was destroyed in an accident 6 km southwest off Beirut International Airport (BEY), Lebanon. All 82 passengers and eight crew members were killed.

PROBABLE CAUSES:

1- The flight crew's mismanagement of the aircraft's speed, altitude, headings and attitude through inconsistent flight control inputs resulting in a loss of control.
2- The flight crew failure to abide by CRM principles of mutual support and calling deviations hindered any timely intervention and correction.

CONTRIBUTING FACTORS:

1- The manipulation of the flight controls by the flight crew in an ineffective manner resulted in the aircraft undesired behavior and increased the level of stress of the pilots.
2- The aircraft being out of trim for most of the flight directly increased the workload on the pilot and made his control of the aircraft more demanding.
3- The prevailing weather conditions at night most probably resulted in spatial disorientation to the flight crew and lead to loss of situational awareness.
4- The relative inexperience of the Flight Crew on type combined with their unfamiliarity with the airport contributed, most likely, to increase the Flight Crew workload and stress.
5- The consecutive flying (188 hours in 51 days) on a new type with the absolute minimum rest could have likely resulted in a chronic fatigue affecting the captain's performance.
6- The heavy meal discussed by the crew prior to take-off has affected their quality of sleep prior to that flight.
7- The aircraft 11 bank angle aural warnings, 2 stalls and final spiral dive contributed in the increase of the crew workload and stress level.
8- Symptoms similar to those of a subtle incapacitation have been identified and could have resulted from and/or explain most of the causes mentioned above. However, there is no factual evidence to confirm without any doubt such a cause.
9- The F/O reluctance to intervene did not help in confirming a case of captain's subtle incapacitation and/or to take over control of the aircraft as stipulated in the operator's SOP.

Susan the other` , May 17, 2019 at 12:31 pm

Does Lufthansa make its own planes?

JDM , May 17, 2019 at 12:33 pm

Boeing and Airbus, maybe some regional jets too. I don't think any airline makes their own planes.

d , May 17, 2019 at 12:37 pm

You could keep older aircraft longer, paying more for fuel, and maintenance. Both of which would be much higher. Now the question is will 737 survive this fiasco? And Boeing

Yves Smith Post author , May 17, 2019 at 3:24 pm

American Airlines is still flying some 40 year old 747s, which are fuel hogs. I love that plane.

JDM , May 17, 2019 at 3:54 pm

American retired its 747 quite a while back. Maybe you're thinking Delta/Northwest? They had them until recently. Don't think any U.S. airlines are using 747's anymore.

Yves Smith Post author , May 17, 2019 at 4:29 pm

Qantas is and they code share long haul flights with American. So yes, technically not American. That may be how my colleague saw an "American" flight with a 747.

Cathay Pacific, Lufthansa and Virgin Air are still using 747s.

JDM , May 17, 2019 at 5:07 pm

Ok, that explains it. Hard to tell sometime who you are really flying on when you buy a ticket.

d , May 17, 2019 at 6:23 pm

Now American did fly older md80s, but they have been replacing them, since they were fuel hogs, with guests what?

737s, course most were the previous version. And at the time they retired the md80s, oil was at about $100 a barrel

Titus , May 17, 2019 at 1:32 pm

No, older Airplanes, suffer stress fractures each time they land, every year over 20 years decreases 0.05 the strength of the airframe.

Harrold , May 17, 2019 at 6:02 pm

It is the pressurization and de-pressurization of the fuselage that you need to worry about.

pricklyone , May 17, 2019 at 4:10 pm

How does this figure in? https://airlinerwatch.com/embraer-shareholders-approve-boeing-takeover/

vlade , May 17, 2019 at 5:21 am

If China Boeing certifications (not just Max), and it manages to get a few more states to do so (Iran, Russia, anyone?), it affects, I believe, not just landing and takeoffs, but also using its airspace. That would severely curtail a lof of Asia/Europe flights.

That said, I'd be very very careful saying that politically driven aircraft company in China would be better able to compete with Boeing because the quarterly reports were missing. Political pressure can create the same if not worse outcomes.

Look at Sukhoi SJ-100, the supposed showcase for Russian civilian aviation. And that with Russian having a long history of actually having built commercial planes (Tupolev, Ilyushin, Yakovlev).

PlutoniumKun , May 17, 2019 at 6:10 am

Yes, in all the fuss over the 737, its largely overlooked that the SJ-100 is having very similar problems with possibly similar roots. Sukhoi is of course a primarily military company and I've seen it reported that there was huge political pressure on Sukhoi to get the SJ-100 in production faster than they were comfortable with. While the SJ-100 may be TBTF from the point of view of the Russian government, it is hard to see foreign buyers expressing much enthusiasm for what seems to be such a flawed design.

vlade , May 17, 2019 at 6:55 am

My point is really that political pressure is no better than financial pressure. Both can lead to massive screw up. So betting that China (or whoever) would have a better aircraft just because the party can order it so is naive. I think it's not just about production, but design too. The Moscow incident was after a lightning strike. Somethign has to be badly wrong for a lightning strike to take all electronics on a plane (airframe on its own should do a Faraday's cage, unless it's of course all carbon composite).

As an aside, it is interestign they decided to name it Sukhoi, when Tupolev/Ilyushin names were arguably much more established commercially. I'd not be surprised if some of those were still operating somewhere.

PlutoniumKun , May 17, 2019 at 8:20 am

I agree with that – building airliners is very difficult indeed, as the Chinese and Japanese have shown with their struggles to build viable aircraft.

I don't know how the Russian aircraft industry is organised now, I assume there is a lot of integration between the various historic names (but even in Soviet days, the old bureaus were very competitive against each other). Perhaps 'Sukhoi' was simply considered a sexier name. But certainly there are airliners under development under the Tupolev name.

vlade , May 17, 2019 at 10:12 am

All aircraft companies were nationalised and put into SOE United Aicraft Corporation .

pricklyone , May 17, 2019 at 4:47 pm

I cannot think of any reason save financial motivations why Chinese engineering and design should not be the equal of the West.
The research papers I have seen have Chinese names on them, just as often as not, and we are training their engineers and scientists, as we have done for decades.
The Chinese saw an opportunity to be the low cost manufacturer to the world, and turned it into a powerhouse. Now they only need to start competing on quality instead of price.
If the "CCP" decides to make salaries competitive with the (falling) West, for the necessary talent, in conjuction with a lower cost of living in China, will many return home?
The mode of thought that says the Chinese can only appropriate tech, is a dangerous illusion. Just because they CHOSE to compete on those terms in the past, does not mean they must in future.
When they decide to be the best, instead of the cheapest, and have the political will to fund that choice, how you gonna stop them?
Goldman Sachs?

Adam1 , May 17, 2019 at 7:36 am

A flawed design that Boeing was a partner in making.

Anon , May 17, 2019 at 8:34 am

If Boeing had implemented MCAS correctly from the beginning and there were no accidents to mar its rollout, would you still consider the MAX to be a flawed design?

Synoia , May 17, 2019 at 11:14 am

yes, because of its stall prone flight chateristic.

I'd note a significand difference in large aircraft design between the "English " and "American" schools.

After the B52 and 707, the US school used underslung enginres, whereas the English chose engines buried in the wing root, see De Havilland Comet.

The underslung engine causes nose up on thrust, the wing root engine does not.

The underslung engine is somewhat safer when an enginre bursts, and provides better access for maintenance and replacement.

EVM , May 17, 2019 at 12:18 pm

The Comet may not be the best example given its history, and of course De Havilland is no longer making aircraft and what was left of them was acquired by BAE.

Also should not that pretty much every large commercial airliner built today has pod mounted engines.

Darius , May 17, 2019 at 11:54 am

The MAX is a bridge too far. They used an engine too large for the airframe then papered it over with MCAS. Boeing should have planned for a clean sheet design 15 years ago rather than get jammed up in the competitive situation that produced the MAX.

Carolinian , May 17, 2019 at 12:56 pm

This is a common misconception. The MCAS was added to avoid having to recertify the Max as having different flight characteristics, not to keep it from falling out of the sky. Simulator training that imitated the new tendency to nose up could familiarize pilots with the new handling but Boeing didn't want to do that because it would hurt sales. The reason the MCAS should have been called a critical part that required sensor redundancy–Boeing didn't want to do that either apparently–was because the MCAS itself could cause the plane to fall out of the sky, as we've seen.

At least this is my read of the Seattle Times investigation and they seem to be the ones most plugged in to company insiders.

And this is a critical distinction as a belief that the plane is inherently not airworthy would require Boeing to recall and presumably scrap billions of dollars worth of airplanes.

Darius , May 17, 2019 at 1:23 pm

Then I guess that's Boeing's tough luck.

Darius , May 17, 2019 at 1:30 pm

MCAS shouldn't be the difference between recertification and not.

Carolinian , May 17, 2019 at 2:40 pm

It would burn down Boeing and take all those union machinist jobs with it not to mention a huge blow to the US economy.

And in any case that's not going to happen. The plane will be restored to service. I've seen no serious articles that say differently.

Marshall Auerback , May 17, 2019 at 8:29 am

It's part of China's model. With its Made in China 2025 initiative, the Chinese government has announced a push for Chinese leadership in ten key industries, including advanced information technology, aviation, rail, pharmaceuticals, and others.This preceded the Boeing 737 fiasco. It's a longstanding part of their economic development model.

vlade , May 17, 2019 at 10:13 am

Yes, but it still doesn't mean the resulting design will be any good. There was a lot of "made in SU" drives (for items that they could not import from the west, like semiconducters), including a lot of design stealing (like intel's 8080 chip), but most of them failed miserably.

Yves Smith Post author , May 17, 2019 at 12:16 pm

I never once suggested a Chinese manufacturer would be the beneficiary of this strategy. You are straw manning me. I was explicit that large commercial aircraft manufacture is a duopoly.

In fact, China would have clean-looking hands in going after Boeing because it didn't have a credible national manufacturer as an alternative, unlike the US targeting Huawei.

Ten years out is a different matter. The Chinese think in those terms, the US doesn't.

vlade , May 17, 2019 at 12:56 pm

"In China, the planes will be built domestically, and will not be subject to the arbitrary dictates of private portfolio managers;they will not be constrained by strategies that seem largely to be focused on meeting (or beating) an arbitrary quarterly earnings per share figure."

Emphasis mine.

This is not yours, but it is in the post. It says that the CCP (because stuff like this will be run by CCP, directly or not) will run it better than private ownership, because it will not have the constraints the private ownership has.

Marshall Auerback , May 17, 2019 at 2:30 pm

They've done a pretty good job in other areas which have been state led.

Yves Smith Post author , May 17, 2019 at 4:49 pm

In context, you were linking the idea of the 737 Max losing a lot of appeal immediately if the Chinese and others refused to recertify the plane, with a point made by Marshall about China's long-term ability to compete with Boeing when these were independent arguments. You were creating the impression that I had argued that China could pick up sales from Boeing now, when I had said no such thing and Travis and Marshall took pains to stress that China had long-term, not immediate, potential to be a serious competitor.

PlutoniumKun , May 17, 2019 at 5:27 am

To more directly address the article, this confirms very much the arguments in yesterdays article about industrial policy. The US has an industrial policy for aerospace – basically 'put billions into military and hope some of it benefits civil aviation by way of overspill'. If the US had a real civil aerospace strategy, it would never have allowed McDonald Douglas to be merged into Boeing and the MD series to die. The US is more than big enough for two competing civil airline companies.

There is also I think an increasing problem in that military aircraft are now almost entirely diverged from civil aviation in terms of engineering. Government money to design and build B-52's led directly to the development of 7-series civil aircraft – they are basically the same thing, just different shaped bodies. But in terms of materials construction, electronics, even basic aerodynamics, there is no relationship whatever between a B-2 bomber and a modern airliner. So the 'trickle down' of defence investment is no longer benefiting civil aviation.

A sensible strategy would first of all split Boeing up between defence and civil as the very first item on the agenda.

Lambert Strether , May 17, 2019 at 5:47 am

Unfortunately from a financial perspective, if Boeing's cash cow, the 737, just turned into a dog, the "Good Boeing" would be the military side, and the "Bad Boeing" the civilian side. What then?

PlutoniumKun , May 17, 2019 at 6:06 am

I'm sure some Chinese businessmen would be more than happy to buy up the designs and plant for the existing aircraft. There might be a little question though as to where they'll be built .

PlutoniumKun , May 17, 2019 at 6:14 am

More seriously though, I would see the future of a civil Boeing as a hook up between it and Mitsubishi and Embraer . Between the three of them they could maintain an impressive array of aircraft. There would be quite a cultural clash though.

The Rev Kev , May 17, 2019 at 6:23 am

Maybe the US government can come in and help. In aircraft talk, it would be a bravo-alpha-india-lima-oscar-uniform-tango.

vlade , May 17, 2019 at 6:56 am

Better civilian aircraft maker than a bank IMO.

Olivier , May 17, 2019 at 4:41 pm

Mitsubishi?? In the wake of the Ghosn imbroglio, which western companies and executives in their right mind would want to get deep in bed with a Japanese company? Japan is only slightly less dangerous for foreigners than China.

Kris Alman , May 17, 2019 at 12:44 pm

But when real engineering clashes with financial engineering, the damage takes the form of a geographically disparate and demoralized workforce

The United States has had a delusional view about education and the workforce, which is evidence in a graphic on p. 6 of this 2007 report; "Tough Choices Tough Times: The Report of the new Commission on the Skills of the American Workforce."
http://www.ncee.org/wp-content/uploads/2010/04/Executive-Summary.pdf

The Prototypical U.S. Industry in 10 years if all goes well?

Obviously, with manufacturing outsourced to "less developed countries," the jobs in these countries would amount to routine work done by both people and machines. American workers would then enjoy creative jobs in research, development, design, marketing and sales and global supply chain management.
http://www.ncee.org/wp-content/uploads/2010/04/Executive-Summary.pdf

On p. 5, the report also points out:

In this environment, it makes sense to ask how American workers can possibly maintain, to say nothing of improve, their current standard of living. Today, Indian engineers make $7,500 a year against $45,000 for an American engineer with the same qualifications. If we succeed in matching the very high levels of mastery of mathematics and science of these Indian engineers -- an enormous challenge for this country -- why would the world's employers pay us more than they have to pay the Indians to do their work? They would be willing to do that only if we could offer something that the Chinese and Indians, and others, cannot.

Even Marco Rubio is beginning to smell the rot of corporate greed and the "shareholder primacy theory"

As Rubio says:

At its core, the problem is that, beginning in the 1970s, the primary objective for companies became maximizing return to shareholders, and that came at the expense of investing in new capacities and in innovation. In essence, it's coming at the expense of the things that lead to growth. In key industries that are critical to our national security and our national interests, that's even more problematic.

Lambert Strether , May 17, 2019 at 2:28 pm

Since when did Marco Rubio take out a Communist Party card?

Grebo , May 17, 2019 at 3:38 pm

It appears Rubio has hidden depths: Marco Rubio Puts Out a Paper Citing Obscure Left-Wing Economists

Richard H Caldwell , May 17, 2019 at 7:10 am

An embarassingly-juvenile error right at the beginning of an otherwise-excellent "angle of attack" on Boeing's shareholder capitalism.

A 10% return on a $million is $100K, not 1.1 $million. Eeesh .

DSB , May 17, 2019 at 9:24 am

My thought exactly. Couldn't read the rest after seeing this.

From Investopedia: Example of How to Use RONA

"Assume a company has revenue of $1 billion and total expenses including taxes of $800 million, giving it a net income of $200 million. The company has current assets of $400 million and current liabilities of $200 million, giving it net working capital of $200 million.

Further, the company's fixed assets amount to $800 million. Adding fixed assets to net working capital yields $1 billion in the denominator when calculating RONA. Dividing the net income of $200 million by $1 billion yields a return on net assets of 20% for the company."

boz , May 17, 2019 at 3:44 pm

AKA RoE or Return on Equity:

From the accounting equation: Assets = Liabilities + Equity

Net Assets = Assets – Liabilities

Net Assets = Equity

Lambert Strether , May 17, 2019 at 2:45 pm

Richard, DCB:

Thanks. From an abundance of caution, we've deleted the passage in question, and will restore it with corrected figures as soon as possible.

MickeyZ , May 17, 2019 at 7:20 am

A minor quibble with an otherwise excellent article but is not the math indicating a 110% annual return, not 10%?

Marshall Auerback , May 17, 2019 at 2:22 pm

It was a typo. Unfortunately not caught in time. We were trying to make it visually easier on the eye and screwed up. Mea culpa.

Lambert Strether , May 17, 2019 at 2:45 pm

Thanks. See my comment immediately above.

Adam1 , May 17, 2019 at 7:47 am

To me one of the most damning things about Boeing's implementation of MCAS on the 737-MAX is that it actually knew how to do this properly, but no longer seems to be capable of leveraging what should be institutional memory. I've only seen it mentioned once, but on a Montour Pilot video the guy describes Boeing's deployment of an MCAS system on a military fuel tanker jet it built in the 1980's. They added the MCAS system on that plane to assist the pilots should its cargo fuel suddenly shift unexpectedly changing the plane position. The system had all of the design features that are missing in the 737-MAX MCAS system that brought about the 2 crashes. At the very least one would have expected that they'd just pull the specs off that MCAS system and say here write us a new one using these requirements. The fact that this obviously didn't happen shows how bad things are at Boeing.

ChristopherJ , May 17, 2019 at 7:59 am

I predicted Boeing would be 'toast' 24 hours after the second crash.

You cannot buy trust with a shit product from country that doesn't have any good values or morals that it pursues

John Beech , May 17, 2019 at 8:02 am

Good grief! Calls for Boeing to be dismantled plays right into the hands of the Europeans (Airbus) and China (Comac) plus Brazil (Embraer). E.g. our competitors. Wide dissemination hurts American interests. Especially because they don't have a realistic basis in fact.

– Or have people forgotten Boeing is America's national champion?
– Do folks have a clue how many jobs we're talking about? (+150K before ancillary industries and partners, just direct empl0yment)
– Have you the slightest clue what this would mean for import/export ratios?
– When you look at an Airbus, haven't you realized it looks an awful lot like a Boeing?
– Ditto Embraer.
– Ditto Comac.
– Who in hell do you think invented almost all the technologies we have in large scale aircraft?
– Have you forgotten about Air France 447, an Airbus A330-203 and the crash in the Atlantic?

The last point is especially important to folks pointing at the putative design flaw of the Boeing (Me? I'm awaiting the final report because depending on newsies is downright stupid). Anyway, the A330 crash involved a genuine design flaw.

Finally, t4o all the nervous Nellies fretting about stuff they know jack about . . . chill. And Susan, reprinting this is a disgrace if not outright treasonous to US national interests. Never have I been so glad for the limited reach of an entity like NC because this is akin to shouting fire in a theater. You are raising concerns and fanning flames about which you know squat! For shame.

Ember Burns , May 17, 2019 at 8:35 am

I feel sorry for you, to have lost your moral compass (if you ever had one). Your jingoistic ravings are sickening in light of the reality that hundreds of innocent people were murdered by corporate scum. It is only right and proper that countries such as France, Brazil and China take Boeing's place. Or have you lost your faith in the "Market"?

Peter , May 17, 2019 at 10:04 am

The over the top jingoism and defense of a company that failed to ensure proper functioning of safety equipment led me to believe that this idiotic response can only be meant cynically directed against an industry on the wrong path

Carolinian , May 17, 2019 at 9:10 am

Thanks for your comment. Airbus has indeed had crashes related to their heavy use of automation and fly by wire technology. One should also point out that air crashes used to be far more common than they are today. The truth is that air travel is extraordinarily safe despite the two Boeing crashes and part of that is because computers and automation make planes and air traffic control safer (along with better training and procedures) , but only assuming the same care is taken with the software as the hardware. Clearly that was not the case with Boeing re the Max and their CEO definitely should resign or be forced out to help restore confidence.

Finally if one wants to fret about airline safety then you might be more concerned about scheduled maintenance that is farmed out to low cost Central American companies or other airline cost cutting measures such as hiring poorly paid and relatively inexperienced pilots for the short hop subsidiaries that are now a staple.

Cal , May 17, 2019 at 5:44 pm

Apropos your comment from today's Sydney Morning Herald:

A former Qantas captain who saved a passenger jet after a computer failure twice sent it diving towards the Indian Ocean has warned that pilot training needs to be bolstered to help deal with rogue systems in an era of greater aircraft automation.

Mr Sullivan was captaining a Qantas A330 on a flight from Singapore to Perth in 2008 when an air-data unit sent incorrect information to other systems, leading to a flight-control computer twice commanding the aircraft carrying 303 passengers to nosedive.

And this from the pilot:

"We practise engine failures in the simulator – now we need to practise automation failures," he said.

"These automated failures are more exotic and you can't just read about them in a manual or on an online course. You have to do it; you have to see it; you have to practise it."

The rest here .

cnchal , May 17, 2019 at 8:23 pm

I wonder how many AI chips are on a plane? Ghosts in the machine, put there deliberately.

Joe Well , May 17, 2019 at 9:10 am

You sound like an MSNBC host.

The Rev Kev , May 17, 2019 at 9:19 am

It was just a matter of luck that these two plane crashes happened overseas you know. This could easily have happened in a commercial flight in the US. Would you be saying the same if a 737 MAX came down trying to fly out of Dallas or LAX or O'Hare? Decades ago Ralph Nader came out with his ground breaking book "Unsafe at Any Speed" which led to massive improvements in car safety in American cars. Would you have opposed those safety measures because they would have given foreign car makers a bit of an edge? Think how many tens of thousands of American were never killed because of this change in safety with American built cars. It is the same deal here. And in a bit of irony, Ralph Nader's grandniece was killed in the last 737 crash so you can expect to hear a lot from him before long.

Carolinian , May 17, 2019 at 9:55 am

The Seattle Times story in today's Links gives a good overview of the pilot question. The gist is that foreign pilots often do have less experience than their American counterparts (because of less private aviation availability) but that Boeing knows that too and should not produce planes that real life pilots can't fly.

Emotional reactions to comments like the above from John Beech are missing the point IMO. Saying that the pilots in these crashes may have done better doesn't let Boeing off the hook even if Boeing is trying to wriggle free in a mistaken attempt to evade responsibility. If nothing else the CEO's ostrich like behavior is reason for him to get the boot.

tegnost , May 17, 2019 at 10:13 am

Fine. But I owe zero allegiance to any corporation, indeed imo it's the other way around. The bailout of the worst people who were most responsible for 2008 could have led nowhere else but here, and that said it's likely this is just the tip of the iceberg, If you crapify enough you wind up with crap, no matter how un-crappy things were when you started.

vlade , May 17, 2019 at 2:02 pm

"the pilots in these crashes may have done better doesn't let Boeing off the hook"

This. In fact, I'd argue it makes it WORSE, if it's true what is in a link in a comment above is correct.

In such a case Boeing knowingly sold aircraft with a known significant difference to an airline with bad training practices. Their (the airline) pilots are even asking FAA to intervene – but I guess if it means fewer sales to Boeing, why would they, given how they outsourced the plane safety to B already?

How's that different from selling a gun to a known psychopath? Uh, I guess that's actually ok in the US, so why not.

Carolinian , May 17, 2019 at 2:43 pm

What is damning to Boeing is that they made a dangerous alteration to the plane–the MCAS–for marketing purposes and didn't even bother to make sure it worked right. There's no way they or their insurance don't pay through the nose in lawsuits.

John Zelnicker , May 17, 2019 at 11:09 am

@The Rev Kev
May 17, 2019 at 9:19 am
-- -- -

Ralph Nader has written an open letter to the CEO of Boeing demanding that he resign.

Sorry I don't have time to look up the link. Gotta work.

Arizona Slim , May 17, 2019 at 11:20 am

Here's the link:

https://nader.org/2019/03/12/open-letter-to-boeing-passengers-first-ground-the-737-max-8-now/

Cat Burglar , May 17, 2019 at 11:19 am

Shouldn't your post be addressed to Boeing's management, and not here?

Ian Perkins , May 17, 2019 at 3:36 pm

It should be addressed to the Chinese. I sincerely hope they have read it!

Synoia , May 17, 2019 at 11:27 am

I admit. I know nothing. I've flown over 3 million miles, caused planes in flight to return brcause I noteced defects in the plane, and am an engineer with both a life long curiosotuy about engineering and systems.

I'm a typical engineer. Yes I know swuat. But I can analyze machines, ask questions, and make deductions.

Here is an Engineering question: Why did Boeing management pay for MCAS to be developesd?

d , May 17, 2019 at 2:00 pm

Because of the new engines for the plane, which are much bigger than the old ones,causing the plane's center of gravity to change, which lead to concerns about stalls. And the reason for the new engines, was because they are much more efficient than the previous engines

JBird4049 , May 17, 2019 at 1:02 pm

Good grief.

"Patriotism is the last refuge of the scoundrel." -- Samuel Johnson

I might be labeled an American nationalist, but really I have no problem accepting that other countries might not want to buy Boeing's American made flying suicide machines for which the company is wholly at fault for. It is not loyalty, patriotism or even jingoism, but fanaticism to blame others for what the company has done to itself, to them and to us as well.

Darius , May 17, 2019 at 1:33 pm

Question authority.

Lambert Strether , May 17, 2019 at 2:20 pm

This comment is the most extra-ordinary example of pom pom-waving I have ever seen. Kudos.

Carolinian , May 17, 2019 at 2:52 pm

I agree the remarks about NC are inappropriate and even offensive but the stuff about Airbus etc is correct and little noted here. Crusading against Boeing management is one thing, but surely it's not in the US economy's interest for Boeing to go under. Not that I'm an economist, but I believe I've read that elsewhere in NC.

False Solace , May 17, 2019 at 2:41 pm

Boeing is doing a perfectly fine job of self-destructing, NC is merely reporting on and analyzing the flames. Even if we don the patriotic blindfold you suggest and shut up about the mass homicide Boeing's planes have caused, do you really think everyone else in the world is going to do the same?

Besides, Boeing has ginormous defense contracts. Even if their civilian line craters their billions in military subsidies will keep them alive no matter how crappy their planes are.

Stephen Gardner , May 17, 2019 at 4:47 pm

Wow! "Putative design flaw"? Putative?? Really? I put that in the same category as "putative harm from tobacco". And I love this little gem of jingoism: "And Susan, reprinting this is a disgrace if not outright treasonous to US national interests." So 300+deaths are ok as long as we can still chant "USA, USA!". Articles like this are why I read NC. I can get jingoistic nonsense elsewhere. "Treasonous to US national interests." What transparent nonsense! And don't talk about jobs because the executives at Boeing are doing their best to eliminate those American jobs. In the US these days there are no national interests only the interests of the real owners of this country. Hint: that ain't me and probably not you either so cling to the vain hope that our economic system still serves the many.

Edward , May 17, 2019 at 8:17 am

I wonder if a taxpayer bailout is in the cards in the future?

Ember Burns , May 17, 2019 at 8:31 am

I read this post this morning and I am still trying to deal with the monstrosity of it. So upsetting. A group of rich people practically committed mass murder and destroyed the livelihoods of thousands in order to become even richer. I am sickened to my stomach to think of all the people I love putting their lives in the hands of these psychopaths who will get away with (Mass) Murder most foul. Vicious, evil, criminals in suits.

Lambert Strether , May 17, 2019 at 2:33 pm

> A group of rich people practically committed mass murder and destroyed the livelihoods of thousands in order to become even richer.

You say that like it's a bad thing.

Oregoncharles , May 17, 2019 at 2:41 pm

Recently flew Southwest, probably on a 737, so yeah.

As a practical matter, a number of reports detail obviously criminal behavior, like failing to report hazards they knew about. At this point, it's a test of the criminal "justice" system whether Boeing executives are prosecuted.

Admittedly, that may not be saying a lot.

Watt4Bob , May 17, 2019 at 8:41 am

Wide dissemination hurts American interests.

Tell that to the American financial wizards who off-shored our jobs and with them the technologies they are based on, all in furtherance of the narrow interests of the investor class.

Or have people forgotten Boeing is America's national champion?

Like GM was america's national champion until it decided to dump manufacturing, and all those pesky employees, to go into finance?

Have you the slightest clue what this would mean for import/export ratios?

Where were you when China invaded the USA via Walmart to destroy our nations retail capacity?

Who in hell do you think invented almost all the technologies we have in large scale aircraft?

And who might I ask moved aircraft manufacturing to China and taught the Chinese to build American planes?

Slam the barn door all you want, the cows are not only gone, they've been re-branded and all this was pro-actively enabled by America's ownership class, the folks supposedly responsible for protecting American interests.

Watt4Bob , May 17, 2019 at 10:31 am

This comment was intended for Mr. John Beech, whose comment has disappeared.

See the other reply by The suck of sorrow, below.

Yves Smith Post author , May 17, 2019 at 4:53 pm

The John Beech comment is still there. You must have replied without replying specifically to his comment.

Watt4Bob , May 17, 2019 at 5:12 pm

Yes, thanks, noticed that later.

S. Haust , May 17, 2019 at 8:55 am

But they did already start housecleaning their executive ranks.

A couple of weeks ago they put Nikky Haley on the board.

Wasn't that good enough?

JDM , May 17, 2019 at 9:41 am

Descent overview, but forecasts of Boeing's demise as an aircraft manufacturer are way premature.

Watt4Bob , May 17, 2019 at 10:36 am

I don't know, a plane that costs between $100-$135 Million to buy, and $Billions in liability judgements isn't likely to fly off the shelves.

(anymore)

Pun intended.

Randy , May 17, 2019 at 7:46 pm

For Boeing maybe it doesn't matter. They are a member of the MIC with commercial aviation as a sideline (hobby) business?

Peter , May 17, 2019 at 10:07 am

https://youtu.be/QytfYyHmxtc?t=7

The suck of sorrow , May 17, 2019 at 10:12 am

John Beech May 17, 2019 at 8:02 am comment confirms my fears: we do live in a fascist state. How else can one portray corporate management criticism as tantamount to treason? Does Mr Beech place Ralph Nader in the same category on account of composing "Unsafe at any Speed"? At the time of publication the automobile industry was easily twenty percent of domestic economic output.

What might drive Mr Beech's strong emotion is the concern of unemployment for himself, family or friends. I think we, as in this country need to think seriously about providing a real safety net for those afflicted by corporate mismanagement. Like unemployment insurance, Boeing and other large entities can fund a pool for these disasters. Better managed companies will pay a lower rate. (Insert plug for uninversal health care here!) I propose this tax as a means to encourage "do the right thing" corporate mentality. MMT does not apply here as in single payer health.

I close by stating that both we as a nation and Boeing as a corporation can do better. The improvements lie on differing tangents, but are both critically necessary.

Susan the other` , May 17, 2019 at 12:28 pm

It has been said that medicare for all – national health insurance – will, in fact, make our corporations more competitive by eliminating the expense they carry of subsidizing the sleazy medical insurance industry. So that would be a step in the right direction for our corporations. Costcut the sleaze and keep the quality-maintenance expenditures. To that end another good cost cutting measure would be to eliminate the "services" of all the "dilettante portfolio managers" as they are easily as sleazy as health insurance companies.

Randy , May 17, 2019 at 7:49 pm

That has been said since Truman and corporations have been against national health insurance since Truman. They know something everybody else doesn't.

Jim A. , May 17, 2019 at 10:30 am

I'm betting that if you looked at the qualifications of those in the executive suite and the board of directors, you'd find more people whose experience is in financial engineering than aviation engineering. THAT needs to change and quickly.

Ian Perkins , May 17, 2019 at 3:55 pm

That'll no doubt be the reason Nikki Haley's on their board. She has a background in finance and accounting, in addition to her prowess in bullshitting, browbeating and belittling the UN.

Interested Party , May 17, 2019 at 10:55 am

Not sure why you didn't add a discussion of Boeing's KC-46. This is the modified version of the 767 to be used as the latest and greatest version of the Air Force air re-fueling fleet. From what I understand, this adds an interesting dimension to your position that the problems at Boeing are from relentless cost cutting to maximize shareholder profits because the KC-46 is a cost-plus adventure where the taxpayer picks up the cost of Boeing's failures. My information is that the delay in delivery of the KC-46 is quietly causing many unanticipated problems for the Air Force in their efforts to transition to the new aircraft. For example, I understand that there is a regular AF wing somewhere in the midwest where their former aircraft, KC-135s, were transferred to other units in anticipation of the delivery of the KC-46s. But presently the pilots have no planes to fly because the new anticipated delivery date has been pushed back to November. This article briefly describes the problem.

https://www.airforcetimes.com/news/your-air-force/2019/04/02/air-force-again-halts-kc-46-deliveries-after-more-debris-found/

Related to this is the fact that Boeing also does considerable other work for the military on a cost plus basis. I am informed that the AF is now taking delivery of modified KC-135s which have been re-fitted with "glass" cockpits virtually identical to the latest 737 cockpits. To my mind, this information begs the question: Can Boeing properly manufacture aircraft regardless of the profits involved?

shinola , May 17, 2019 at 11:33 am

A minor quibble with the article: While reducing the profit margin from 21% to 19% is just a 2 percentage point drop in that headline figure, it represents a bit over 9% cut in the actual margin (19 is @90.476% of 21). I believe that's how it would be seen from the exec. POV.

sd , May 17, 2019 at 11:59 am

Why would China not design and build its own passenger plane?

Lambert Strether , May 17, 2019 at 2:15 pm

They are. It's not easy and it takes time.

oliverks , May 17, 2019 at 12:10 pm

I am not sure the Murata reference is the correct one as you don't really think of them as a big semi player.

There are a number of internal chinese players that could edge out Qualcomm such as MediaTek, Rockchip, and Allwinner. MediaTek is the most advance, but in reality all 3 are mainly using technology from ARM. Another wild card is Samsung. It may license it chipsets to China, and they are very capable.

What the US can do (and does do) is require you to buy chips from certain vendors to join certain networks. So if you want to be on the AT&T network you often have to source your chips from a very limited selection of suppliers.

However, as the US market is relatively small in comparison to Europe and Asia, and because of the difficulty of working in the US market, you may see major vendors do fine by just ignoring the market entirely.

Oliver

Yves Smith Post author , May 17, 2019 at 12:19 pm

The Murata point is straight from the Financial Times yesterday:

Mark Li, an analyst at Bernstein, said alternative suppliers are limited but would include Murata of Japan.

https://www.ft.com/content/21727292-7796-11e9-bbad-7c18c0ea0201

jo6pac , May 17, 2019 at 1:17 pm

I'm not sure how this all turns out but in the long run China will be forced to do what Russia has done, Make it at Home.

https://asia.nikkei.com/Economy/Trade-war/Exclusive-Huawei-stockpiles-12-months-of-parts-ahead-of-US-ban

templar555510 , May 17, 2019 at 1:22 pm

About ten years ago the English economist John Kay produced a wonderful book he called ' Obliquity ' . His thesis, with extensive evidence from all manner of human activity throughout the ages , was that almost any goal pursued directly was unlikely to succeed . The main subject of the book was however the pursuit of profit, which he showed with numerous examples, was most successfully achieved when it wasn't pursued directly, but rather by pursuing first and foremost other objectives ; for example and perhaps most obviously quality with profit flowing from the achievement of that objective. Hence the title of the book . Again with examples he shows how corporations that reject the notion that they have responsibilities to employees and the wider society in favour of ' shareholder value ' simply wither on the vine. The fate of Boeing if it pursues its present stance is unlikely to be anything other than oblivion . Come on Boeing try some obliquity.

Lambert Strether , May 17, 2019 at 2:17 pm

See Naked Capitalism, December 30, 2007 .

montanamaven , May 17, 2019 at 4:27 pm

Has anyone mentioned Andrew Cockburn's Harper's article "The Military-Industrial Virus"? I'm late to this discussion but he talks about Boeing merging with McDonnell Douglas and how everything changed after that.

That began to change in 1997, when Boeing merged with ­McDonnell Douglas, a defense company. In management terms, the merger was in effect a ­McDonnell takeover, with its executives -- most importantly CEO Harry Stonecipher -- ­assuming command of the combined company, bringing their cultural heritage with them. The effects were readily apparent in the first major Boeing airliner initiative under the merged regime, the 787 Dreamliner. Among other features familiar to any student of the defense industry, the program relied heavily on outsourcing subcontracts to foreign countries as a means of locking in foreign buyers. Shipping parts around the world obviously costs time and money. So does the use of novel and potentially risky technologies: in this case, it involved a plastic airframe and all-­electronic controls powered by an extremely large and dangerously flammable battery.

Cockburn goes on to talk about the 737 Max 8 and the Boeing V-22 Osprey which has had multiple crashes.
Seems disturbing that the new Defense Secretary Shanahan headed up Boeing's Missile Defense Systems and the Dreamliner program.
In the same article, he mentions the book "Shattered Minds" about the faulty helmets worn by soldiers and Marines in Iraq and Afghanistan. They amplified the effects of the explosions on the brain and "were found to be dangerously vulnerable to bullets and shrapnel, thanks to a corrupt contractor skimping on the necessary bulletproof material."
I just saw the Broadway revival of the 1947 play "All My Sons" by Arthur Miller. The lead guy let faulty cracked engine parts go into airplanes with 21 WW II pilots crashing and dying.
What's good for business is not necessarily good for you and me.

Christy , May 17, 2019 at 5:15 pm

It was actually linked to on NC under 'Links', 'Imperial Collapse Watch' on 5/13/19.
Yes, it is a good article. Glad you enjoyed it.

TG , May 17, 2019 at 4:41 pm

Yes yes, Boeing did a bad thing. But never build another airliner? You would prefer Airbus to have a monopoly? You would prefer to ride some nice Russian airliner? Yes this a tragedy, and it would be nice if some executives would go to jail, but Boeing nevertheless makes airplanes that let millions of people fly all over the world with risk levels that, while not zero, are very nearly superhumanly good (though to be admitted: this is largely because the public remains intolerant of errors in this area).

Consider the anti-inflammatory drug Vioxx, apparently marketed on misleading claims, that some estimates put at causing "between 88,000 and 139,000 heart attacks, 30 to 40 percent of which were probably fatal, in the five years the drug was on the market" (wikipedia). Of course nobody went to jail and the company is still in business and printing money No it doesn't excuse Boeing in this case. But it should put Boeing's misdeeds in perspective.