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Neoliberal Propaganda:
Journalism in the Service of the Powerful Few

Journalism Vacation from Truth is a direct threat to democracy. Without journalistic integrity, there is no democracy as the average voter cannot make an informed choice. Inverted totalitarism won some time ago.

The FAKE NEWS media (failing @nytimes, @NBCNews, @ABC, @CBS, @CNN) is not my enemy, it is the enemy of the American People! ~ Donald Trump

Skepticism > Political Skeptic > Media-Military-Industrial Complex > Propaganda

News Neoliberal newspeak Recommended Links US and British media are servants of security apparatus Tucker Carlson rejection of neoliberalism Neoliberal war on reality Demonization of Putin
NeoMcCartyism Integrity Initiative Journalists for Hire How the CIA Buys the News by Dr. Udo Ulfkotte Luke Harding: a pathetic author of book that rehash Steele Dossier Edward Lucas as agent provocateur William Browder, economic rape of Russia and Magnitsky Act Litvinenko poisoning
Charlie Hebdo - more questions then answers Manchester attack vs Charlie Hebdo Patterns of Propaganda Who Shot down Malaysian flight MH17? The Guardian Slips Beyond the Reach of Embarrassment NYT degeneration into a deep state stooge Pussy Riot Provocation -- the hand of MI6?
Neoliberal war on reality Classic Hypocrisy of British Ruling Elite Is national security state in the USA gone rogue ? Steele dossier The importance of controlling the narrative MSM as attack dogs of color revolution Anti Trump Hysteria
Corruption of the language Doublespeak Whataboutism as a thought crime Media-Military-Industrial Complex Freedom of speech played by Western MSM as three card monte The Deep State Special Prosecutor Mueller and his fishing expedition
Discrediting the opponent as favorite tactic of neoliberals Purple revolution against Trump Anti-Russian hysteria in connection emailgate and DNC leak Deconstructing neoliberalism's definition of 'freedom' Co-opting of the Human Rights to embarrass governments who oppose neoliberalism Bullshit as MSM communication method Manipulation of the term "freedom of press"
MSM Sochi Bashing Rampage Cold War II "Fuck the EU": State Department neocons show EU its real place Michael Wolff's "Fire and fury" revelations and slander of Trump administration Coordinated set of leaks as a color revolution tool Neo-fascism New American Militarism
Deception as an art form Diplomacy by deception Media as a weapon of mass deception Inside "democracy promotion" hypocrisy fair The attempt to secure global hegemony Democracy as a universal opener for access to natural resources Nation under attack meme
Lewis Powell Memo Anatol Leiven on American Messianism Neocolonialism as Financial Imperialism What's the Matter with Kansas Groupthink Soft propaganda Boeing 737 MAX fiasco
Alice's Adventures in Wonderland and Through the Looking Glass The Good Soldier Svejk Nineteen Eighty-Four Brave New World Propaganda Quotes Humor Etc

"The truth is that the newspaper is not a place for information to be given, rather it is just hollow content, or more than that, a provoker of content. If it prints lies about atrocities, real atrocities are the result."

Karl Kraus, 1914

WAR IS PEACE. FREEDOM IS SLAVERY. IGNORANCE IS STRENGTH

1984

We are the world, we are exceptional, we cannot fail. The elite will lie, and the people will pretend to believe them. Heck about 20 percent of the American public will believe almost anything if it is wrapped with the right prejudice and appeal to passion.

jessescrossroadscafe.blogspot.com, Feb 04, 2015

"The media's interest in the well-being of a foreign population is directly proportional to the West's interest in toppling its government, while editorial standards are inversely proportional to its enemy status." ~John McEvoy

The UK's propaganda machine rivals and even surpasses Soviet Russia and Nazi Germany.  

~ Comment by Gravatomic , Apr 17, 2019 link

I think journalists today — elite journalists at least — absorb the biases of the ruling neoliberal oligarchy far more readily than they used to do. The media establishment is populated by yes-men. I do not understand how any skeptical person can, in good conscience, trust a western MSM description of foreign events. You need a second source to compare coverage. The mainstream media gives us no real news. Just the regurgitation of  talking points they were given. Seeing how they treat the concept of truth these days, one might think that 1984 dystopia was an understatement. 

Truth killing is a meta-issue ( nationalinterest.org (

The problem is fundamental, and relates to a broad spectrum of policy issues both foreign and domestic, because truth — factual reality — is a necessary foundation to consider and evaluate and debate policy on any subject. 

Crushing the truth means not just our having to endure any one misdirected policy; it means losing the ability even to address policy intelligently. 

To the extent that falsehood is successfully instilled in the minds of enough people, the political system loses what would otherwise be its ability to provide a check on policy that is bad policy because it is inconsistent with factual reality.

I think it is good that people question their lying politicians and these lying, corrupt partisans pretending to be MSM pundits. If that means that MSM try to slander the people as “conspiracy theorists” you should take it with a grain of salt. As Gore Vidal quipped they are actually  "conspiracy analysts" not "conspiracy theorists".  BTW the term was invented by CIA to crush alternative versions of JFK assassination.  This label is a form of censorship, plain and simple.

I would rather be a conspiracy theorist than take anything CNN or FOX says as gospel. Or, God forbid, believe what US politicians say to justify their action or inaction. Skepticism is good. These people don’t automatically deserve our trust. As Reagan said (translating Russian proverb) "Trust but verify".  

The angle under which this page views events and MSM can be called anti-neoliberal angle (please note that the term populism is the attempt to discredit any anti-neoliberal movement). Until recently such sites were a lone  voice. In 2019 this changed. See Tucker Carlson rejection of neoliberalism

If you take in television news as truthful information, that's all a critically thinking person needs to know about you. In reality 99% of political coverage is neoliberal propaganda, sometimes refined, sometimes crude.

Propaganda can be defined as a war on reality using fake news, disinformation, projection, witch-hunts (see neo_Mccarthhyism) and other methods. An attempt to create an artificial reality.

Propaganda can be defined as a war on reality using fake news, disinformation, projection, witch-hunts (see neo_Mccarthhyism)  and other methods. It is an attempt to create an artificial reality.  The key here is controlling the narrative.  For example, "fake news" hysteria is a perfect method of suppressing of dissent and questions about MSM ties to three-letter agencies ( see US and British media are servants of security apparatus )

Journalists manipulate us in the interest of the Powerful. Do you also have the feeling, that you are often manipulated by the media and  lied to? Then you're like the majority of Germans. Previously it was considered as a "conspiracy theory". Now it revealed by an Insider, who tells us what is really happening under the hood.

The Journalist Udo Ulfkotte ashamed today that he spent 17 years in the Frankfurter Allgemeine Zeitung. ...he reveals why opinion leaders produce tendentious reports and serve as the extended Arm of the NATO press office. ...the author also was admitted into the networks of American elite organizations, received in return for positive coverage in the US even a certificate of honorary citizenship.

In this book you will learn about industry lobby organisations. The author calls hundreds of names and looks behind the Scenes of those organizations, which exert bias into media, such as: Atlantic bridge, Trilateral Commission, the German Marshall Fund, American Council on Germany, American Academy, Aspen Institute, and the Institute for European politics. Also revealed are the intelligence backgrounds of those lobby groups, the methods and forms of propaganda and financing used, for example, by the US Embassy. Which funds  projects for the targeted influencing of public opinion in Germany 

...You realize how you are being manipulated - and you know from whom and why. At the end it becomes clear that diversity of opinion will now only be simulated. Because our "messages" are often pure brainwashing.

Gekaufte Journalisten - Medienwelt Enthüllungen Bücher - Kopp Verlag

Simplifying, the US MSM foreign events media coverage (and large part of domestic coverage related to the opposition to neoliberalism and neoliberal globalization, see Anti Trump Hysteria during elections and immediately after them ) has very little to do with the reality and is mostly a barometer of the paranoia of the US neoliberal elite.  It is 100% propaganda, or as CBS like to call it "fake news".

How does Fake History and Fake News in the US MSM gradually superseded their reality-based version (which never was perfect, and often quite distorted)  is a very interesting question but it is too big for this page. I would only say that this process is closely connected with the process of the neoliberalization of the US society which started in full force in late 70th (see also late Sheldon Wolin  notion of  Inverted Totalitarism) . We can take election of Reagan as a starting point although the process started immediately after WWII. From this point "fake news" were enforced on the US society as the only acceptable narrative? Which, is essence, is a neoliberal war on reality.

The process started with the creation of CIA. The key question that arise in this regard is whether  representative democracy is compatible with the existence large all-powerful and largely uncontrollable and positioned "above the law" intelligence  agencies. 

The key question that arise in this regard is whether  representative democracy is compatible with the existence large all-powerful and largely uncontrollable and positioned "above the law" intelligence  agencies.

At some point any society with powerful intelligence  agencies naturally arrive to the point when "the tail wags the dog."  In other words they became political power and in institutional hierarchy are positioned above White House.  In the USA this probably happened  around 1963, with the JFK assassination.  In a way the USSR via Truman enforced its model of governance on the USA ;-). Creation of intelligence agencies by Truman was actually the act of the creation of national security state. Which could be  viewed as an official end of the US democracy with quick (less then two decades) rise to power of the Deep State (with the first major victory demonstrated to the US people in 1963).  

With it the huge apparatus of state propaganda (and by extension means of suppressing of dissent) intelligence  agencies, which gradually acquired political power including considerable (but not yet absolute, that will come much later, after 9/11) level of control of MSM  (see Church Committee - Wikipedia ).   Which is documented in the book by Dr. Udo Ulfkotte Journalists for Hire How the CIA Buys the News

After 1963, the level outrage in the society was such that there were some meek attempts to check this power, especially the power of intelligence agencies over the MSM (Church Committee - Wikipedia  was probably the most well known) but they lead to nowhere.  CIa and other inteeligence againces remain positioned above the White House.  

Color revolution against Trump (aka Russiagate) launched by CIA and FBI after election has shown who is the real master of the USA. It was accompanied by unprecedented neo-McCarthism campaign in which neoliberal MSM lost any remnants of decency and objectivity. 

The recent incident with CIA director Gina Haspel lying to President  Trump to inflict severe sanctions on Russia is just a confirmation of the level of this influence. She will never be fired for her  "transgressions"

Apr 17, 2019 | www.moonofalabama.org

William Gruff , Apr 16, 2019 4:41:41 PM | link

"If Trump were not in on the schemes he would just fire his underlings!"

This sentiment indicates a failure to understand the power dynamics at play here. Haspel is not the "underling" . Trump is the underling. Sure, being that he is also an oligarch makes Trump's role in the show complicated, but Presidents are installed in order to serve the oligarchy, and the CIA are top level strategists/enforcers for the oligarchy.

In the real organization chart for the empire the CIA is above the President. This has been the case in the US since Kennedy.

Trump cannot fire Haspel or Pompeo. They can fire him, though, and with a sniper's bullet if they want.

Unfortunately for the oligarchy, that would cause additional complications at a time when they have lots of tricky and inexplicably unstable (for them) operations ongoing, which is why they are just steering Trump around instead of replacing him. And Trump is willfully cooperating, even if they are not filling him in on the plans.

Trump will not fire Haspel. He can't. He's just an actor playing a role in a show, and Haspel is one of the producers/writers of that show. If she doesn't put firing in the script then Trump cannot say those lines. I doubt he really wants to anyway.

Principles of War propaganda

 Principles are are well known since the WWI (Falsehood in War-Time):

1. We do not want war.
2. The opposite party alone is guilty of war.
3. The enemy is the face of the devil.
4. We defend a noble cause, not our own interest.
5. The enemy systematically commits cruelties; our mishaps are involuntary.
6. The enemy uses forbidden weapons.
7. We suffer small losses, those of the enemy are enormous.
8. Artists and intellectuals back our cause.
9. Our cause is sacred. "The ages-old 'God bless America' is playing once more."
10. All who doubt our propaganda, are traitors.

The blog empirestrikesblack cites Belgian investigative journalist Michel Collon who has outlined five principles driving war propaganda:

  1. Obscure one’s economic interests;
  2. Appear humanitarian in work and motivations;
  3. Obscure history;
  4. Demonize the enemy; and
  5. Monopolize the flow of information.

NeoMcCarthyism

NeoMcCarthyism campaign which was launched around mid 2016 by Democratic Party operatives as tactical tool to distract attention from DNC corruption and illegal removal of Bernie Sanders from the Democratic ticket after lection of Trump turned into important component of color revolution against Trump. And was fueled not only by MSM but also powerful factions of neoliberals and neocons in US intelligence agencies concerted about their future and the level of financing of "national security parasites".  They also have skeletons in the closet to hide (especially FBI and CIA) and did not prepare well to the Trump victory as this was a huge surprise for everybody including Trump himself.  See Steele dossier and Strzok-gate

Please note that the original McCarthyism campaign lasted more then a decade. And McCarthyism was not exactly or only about Communist infiltration into the US government. It has elements of a more general framework of suppressing any "dissidents" who question "official narrative" and simultaneously served as the framework of brainwashing of population creating a stereotype of enemy, in best Bolsheviks, or, if you wish Nazi Germany, style. In other words, like in famous Orwell novel 1984, under McCarthyism questioning of official narrative has  become a "though  crime" (much like it was in the USSR, especially under Stalinism period).   And repressions were real, although far less extensive and brutal, than in the USSR in 30th.  Thousands of people lost jobs and were blacklisted. Many ostracized, especially from artistic circles, committed suicides.

While Senator McCartney has a certain gist for blackmailing people and, being an alcoholic, he probably would be a suitable candidate for high position in NKVD, he was not a pioneer. He was just a talented follower. This type of modern witch hunt was first implemented on large scale by Bolsheviks in Russia after 1917.  Actually Bolsheviks originated many modern methods of brainwashing of the population.  Which later were enhanced and further developed in Nazi Germany and than imported to the USA after WWII.

That all brings us to the concept of "deep state" and its control of MSM.  The problem with the "deep state" approach to governance is that it replicates Bolshevism on a new, more polished,  level, with high officials of intelligence agencies, Wall Street and  military industrial complex as a new Politburo.  Which is not elected but still controls that nations. So much for remnants of democracy in the USA.  That does not mean that some deviations from the "Party line" are impossible: the election of Trump is one  such event. But loop at the power of the reaction of the "deep state" on this event. Not that Trump (who can be viewed as some kind of Republican "Change we can believe in" Obama" ) was intended to follow his election promises in any case.  The level of vetting of candidates is two party system probably is higher then many of us suspect.

As currently there is no alternative to neoliberalism, the current situation will continue to exist. Notwithstanding  the fact that neoliberal ideology was discredited after 2008 financial crisis, much like Bolshevism in 60th. Bolshevism as a theocratic ideology was essentially dead after WWII (although it managed to kick the can down the road for another 45 years). After 60the Soviet people despite constant brainwashing started to have wide-ranging doubts about the communist state and communist ideology. Listening to state-sponsored propaganda radio-stations from the West such as BBC and Voice of America became national pasture of Soviet citizens, especially educated one. Despite all the jamming.  Similar situation happened with the USA after 2008, when citizen suddenly start showing some level of interest RT broadcasts and views on internal situation in the USA ;-). And, of cause, all this needs to be  stopped. In the name of the "health of the state", democracy be dumned (religious term which literally means "condemned to eternal punishment")

In this particular sense, imitating the enemy by the USA elite after WWII, which was done to fight communist  threat (which was overblown) was a very dangerous course with far reaching consequences.  The new level of this process of "imitating  the enemy" now started with the USA -- the rise of alternative press (kind of Samizdat replica from Soviet past) and clumsy attempt of the deep state to suppress it claiming that they are propagator of "fake news" with the subtext that they are Russian agents  (the campaign which spectacularly backfired: which the help of President Trump tweets this term now became the standard nickname of the "official" US MSM).  That brings us directly to revising Stalin's "Show trials" and corresponding witch-hunt in the USSR.  Appointing  Muller to investigate Trump for "Russian connection" (so called "Russiagate") replays favorite theme of accusing enemies of Stalin of being British agents.  On a new level incorporating set of political technologies of overthrowing the legitimate government commonly known  as "color revolution" technologies. But in both cases it is all about eliminating political rivals.

In broader context the current practice of manipulating population is similar to "high demand cults" style practice  -- Bolshevism actually can be best viewed as a religious cult merged with the political movement, much like political Islam today ( Belief-coercion in high demand cults ):

They use all of the techniques as "low demand" faith groups use: requiring members to accept a system of beliefs, conforming to certain behavioral norms; expecting them to involve themselves in the life of the congregation, etc. However, mind-control groups add many additional methods, and take them all to a much higher level. Some are:

Members are not physically restrained from leaving the group. They are not held prisoner. They can walk away at any time. But there are strong pressures to remain. If they left, all social and emotional support would disappear; they will often be shunned. Some groups teach that God will abandon or punish them if they leave. They may be told that they will die in the imminent war of Armageddon if they leave the protection of the group.

The main methods here always was the generation and totalitarian control of "suitable" narrative (that's why Sheldon Wolin called neoliberal society "inverted totalitarism"):

"The primary aim of official propaganda is to generate an "official narrative" that can be mindlessly repeated by the ruling classes and those who support and identify with them. This official narrative does not have to make sense, or to stand up to any sort of serious scrutiny. Its factualness is not the point. The point is to draw a Maginot line, a defensive ideological boundary, between "the truth" as defined by the ruling classes and any other "truth" that contradicts their narrative. "

Gerald Celente coined the  term "presstitutes", which is obviously politically incorrect, but still is a very precise term: presstitutes sell themselves to neoliberal establishment for access and governments to prosper financially and to keep their jobs. In the USSR journalist were called "soldiers of the Party" so in the less humiliating way we can call them "soldiers of neoliberal establishment" ;-). 

Read more

Due to the size an introductory article was converted to a separate page Neoliberal Propaganda


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"It tends to be all accurate, but not in an over-all context."

Donald Rumsfeld

"Citizens must be alert to propaganda and
glittering generalities is a type of propaganda
which often uses words such as freedom and patriotism."

"Civics in Practice". Page 274

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[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] China Has Already Lost the Trade War

May 20, 2019 | www.theamericanconservative.com

Indeed, the biggest cost may be imposed on investors, who for years have inflated the economic potential of communist China's state-directed economy. Major public companies in the United States, including Apple, Caterpillar, and Boeing, are among some of the leading exporters to China. Yet exports to China accounted for just 7.2 percent of overall American exports in 2018. According to the U.S. Trade Representative , the top export categories that year were: aircraft ($18 billion), machinery ($14 billion), electrical machinery ($13 billion), optical and medical instruments ($9.8 billion), and vehicles ($9.4 billion).


grumpy realist May 17, 2019 at 6:55 am

Hmmm. This sounds suspiciously like the arguments Brexiters have dragged out about the EU. Remember the "German car manufacturers will help us get everything we want because we're such a large market and they can't afford to lose us"?

People of a country can decide to put up with a heck of a lot of economic pain if they decide they're defending their country.

Dan Green , says: May 17, 2019 at 7:01 am
Base issue seems clear. Two large economies with very different models of governing. One a Totalitarian state run economy, and our economy based on greed and consumption, to support GDP. The theory that the world need be interconnected by trade, has run its course. We really don't even need a Nafta re done treaty. All 3 economies have exhausted what works for them, and can simply abandon what doesn't. If a cuntry has something to sell and the buyer country sees a price advantage the deal will go down.
Kent , says: May 17, 2019 at 7:10 am
Tariffs do not get passed along into higher consumer prices unless the product has a very high inelasticity in demand.

Here's a thought experiment: suppose I sell an imported product for $10. The government imposes a 25% tariff, so I decide to up the price to $12.50. Here's your issue: if I could charge $12.50 for the product, why wouldn't I just have charged that in the first place? Charity? No, I didn't charge that because every time I tried, sales collapsed.

And if you understand retail, especially imports, gross margins are enormous. Sales prices can be 10 times cost of goods. So that $10 product probably just cost $1. And a 25% tariff on $1 is only 25 cents. Top of the line iPhones cost about $180 to make but retail for close to $1000.

Tariff expenses come out of some combination of negotiated lower prices with vendors, lost jobs as importers seek to cut costs, and lower profits. Consumer prices are the last thing to consider.

Slugger , says: May 17, 2019 at 9:58 am
Please excuse my ignorance. We hear about a war on this and a war on that all the time. Now a trade war which we are winning (or not). How will we know that we won? After victory do we buy more stuff from China or less? Will their prices for stuff be higher or lower? I am a financially comfortable retired person who has plenty of stuff that I have accumulated over the years; a trade victory might have a different meaning to a young couple starting a life. Who gets the spoils of victory, me or the youngsters?
TheSnark , says: May 17, 2019 at 10:10 am
China has been running much the same economic model as Japan in the 1970's and 1980's, an export-led autarchy heavily dependent on debt financing. When Japan started to open its financial markets in the later 1980's, things started grinding to halt and by the early 1990's stagnation started.

China is on much the same track, though Xi has been careful not to liberalize the financial markets too much, and has otherwise done a good job of keep growth on track. But it can't last, and if a trade war does not tip China into stagnation, something else will in the not-too-distant future.

Any downturn will bring the legitimacy of the CCP into question, and the traditional response of dictatorships in that situation is to find a foreign conflict to distract the population. With mutual distrust, and even dislike, growing on both sides, things could get very messy.

Jon Thaler , says: May 17, 2019 at 11:01 am
In the 2017/2018 trade year, the US exported $12 billion of soy to China. That's. particularly important for two reasons:

* China accounts for the majority of US soy exports, so the trade war affects that sector more that the others you mention.

* The people affected are one of the cores of Trump's base.

The latter point is particularly significant, because the success or failure of the war will be determined by political stamina, not by economics directly. Who can hold out longer, Xi or Trump, as his political position erodes. One of the "weaknesses" of a democracy is the greater sensitivity to the broader political environment (ie, not just the Politburo). Are you so sure that the US will win this war of attrition?

Joshua Xanadu , says: May 17, 2019 at 11:20 am
@Kent – Thank you! Finally someone with actual understanding about retail and the ridiculous profit margins of imported goods, especially from Asia. As someone who worked first-hand at a shoe factory in China, managing the account, I was aghast at how low U.S. companies like Nike or even Wal-Mart drove down the production costs ($6-18 dollars landed), while selling the shoes for $30 – $120 dollars.

Theoretically all that juiced-up profits from outsourcing should have been reinvested to create new jobs for U.S. workers over the past 20 years. That's what economists and corporate lobbyists will argue. Empirically, however, those profits were reinvested to the stock market for fat quarterly bonuses.

Leroy Cabana , says: May 17, 2019 at 11:23 am
The underlying issue with China is their long standing demand to disclose all development info about any product doing trade in China. Take Apple, they butted heads with the FBI and refused to unlock an Iphone that belonged to a killer. Then they enter China and the government there demands all the tec info for phone development and Apple simply hands over their deepest secrets. Its the same for Ford, Cat or any others wanting to do business in China. I for one, can live without any China trade if these have to be the requirements. There is a long list of other cheap labor countries that would welcome our trade without being forced to provide trade secrets.
Kent , says: May 17, 2019 at 11:37 am
@FL Transplant

"So what happens in the next T-bill auction when China doesn't show up and instead sits on the sidelines–does the Treasury end up paying higher interest rates to sell the instruments necessary to finance our federal spending? And, if so, what does an increase in those interest rates do to our economy?"

Interest rates for treasuries are always set by the Federal Reserve. The secret sauce is the Primary Dealer banks. They are required, by law, to make the market for treasuries. Meaning they have to buy any treasuries that aren't sold. And they do so at the interest rate set by the Fed. And they always, always have all the money they need to do so. The Fed just prints it and adds it to their balances.

It's the beauty of a fiat currency. The USA cannot be held hostage to foreign financial agents.

Salt Lick , says: May 17, 2019 at 11:38 am
This trade war is about regime in change in China, as Bannon has said on many occasions. The Chinese are finally waking up to our true intentions. America can't allow a more successful economic model to exist anymore than they allow socialism in Venezuela.

The only surprising outcome of the clash will be that American corporations will experience massive collateral damage due to supply chain disruption and being shut out of the largest consumer market in the world in China.

The U.S. Empire has decided if U.S. corporation can't run ruff shod over the Chinese government like they do here and everywhere else, they cannot be allowed to submit to Chinese government rule in exchange for the benefits of the Chinese market place.

It's probably the only time in recent history that the defense of market forces resulted in a direct hit on the "free" market itself. Like all front line troops, U.S. corporations will suffer many casualties in the battle ahead. They didn't volunteer for this trade war and they had no idea that this would be a hill that many would die on.

The paradox of this situation is not lost on them and most are paralyzed by what lies ahead.

Archie1954 , says: May 17, 2019 at 12:49 pm
You are conveniently forgetting that much of the Chinese goods subject to the increased tariffs are goods manufactured by American corporations utilizing Chinese labour due to its much reduced costs. Those American companies are going to lose market share and profits because of these new tariffs. They will not be happy!
workingdad , says: May 17, 2019 at 2:41 pm
I wonder if they could by commodities? Buy surplus oil would be a logical choice. They could sell their treasuries, use dollars for oil, thereby drive up the price of oil for everyone, including the US.

Granted that could eventually help the US, but in the short term could be a pain.

EarlyBird , says: May 17, 2019 at 2:44 pm
Slugger , I don't think your question is ignorant at all. I think it's very wise. If only we asked the "Why?" and "What does a win look like?" of all these literal and figurative wars, we might get somewhere.

I do not, ultimately, believe Trump's trade war with China is going to make the US into a manufacturing powerhouse again. Those days have come and gone. It will definitely increase the cost of a lot of junk we buy from China.

The hope, however, is that it will force China into a position wherein we could demand more fairness in terms of patents and technology theft.

SteveK9 , says: May 17, 2019 at 3:07 pm
The time when it was beneficial for China to trade real goods for numbers in a computer was long since past. They keep doing it out of habit. Trump is doing both countries a big favor.
Liam , says: May 17, 2019 at 3:28 pm
Historically, it has not been wise to discount China's capacity to overcome disruptions that would vivisect virtually any other civilisational hegemon on this planet. China survived the Mongols, the English, and the Japanese. And itself many many times over.

We're barely a blink in the eye of China's history. I would not be as sanguine about who "needs" whom more over the long term.

(Just to be clear: I have more than my share of criticisms of American trade policy of the past couple of generations, including our posture vis-a-vis China.)

Dakarian , says: May 17, 2019 at 4:33 pm
"Slugger
May 17, 2019 at 9:58 am
Please excuse my ignorance. We hear about a war on this and a war on that all the time. Now a trade war which we are winning (or not). How will we know that we won? After victory do we buy more stuff from China or less? Will their prices for stuff be higher or lower? I am a financially comfortable retired person who has plenty of stuff that I have accumulated over the years; a trade victory might have a different meaning to a young couple starting a life. Who gets the spoils of victory, me or the youngsters?"

You. Definately you.

Youngsters need to be able find a job that pays for their basic needs and a path to be able to keep growing or stabilize that lifestyle.

This war bumps prices higher, but won't bring those jobs back. High skill jobs are already in high demand with few takers so more of those won't help the majority. The rest will either be automated, moved from China to other countries (which is already happening as China wants to move from sweatshops to a consumer middle class economy and places like India and Vietnam are taking up the slack), or abandoned due to a lack of profit margins.

I'm not saying we should or shouldn't do this with China. They haven't exactly been treating us or our companies well after all. But this is NOT going to benefit the regular American. Low skill, sustainable, reliable work is just Not going to be a thing.

What will help is encouraging the ability to gain high skills and mobility for those high skill jobs that are in desperate need of workers, aiding low skill workers so that they can afford the things they need and not be 100% exploited, and figure out what to do with the many many middle age and up folks who were trained to be middle class to transition them into one or the other and not hate life while doing so.

We can go fix or break our trading systems with other countries as we see fit, but we really need to stop thinking it's going to fix things. Same goes for immigration for that matter.

jack Meof , says: May 17, 2019 at 7:00 pm
The author shows his ignorance. The Bank of China is a commercial bank. Foreign reserves are held by the People's Bank of China. Different entities. I assume the rest of the article is full of inaccuracies.
IssacNewton , says: May 17, 2019 at 7:47 pm
It is hard to know if China has already lost. Their published economic numbers are not very accurate. A key point is that the standard economic models of International Trade are wrong. "Free Trade" can have benefits, but does mandate optimal outcomes. For example, lower cost players can transfer economic production to their soil. There are many equilibrium points (vs. the one of standard economics) in international trade when productivity changes or there are economies of scale. With many of these points it would be better a nation not Trade. The US Trade with China fits this bill. This non-standrd was demonstrated by Baumol and See: https://www.amazon.com/Conflicting to -National-Interests-Robbins-Lectures/dp/0262072092/ref=sr_1_5?s=books&ie=UTF8&qid=1473299717&sr=1-5&keywords=Baumol+Trade We need to follow the actual Terrain of economic results vs. the incorrect map of standard economics.

Organizational and Technological stage drives over 80% of economic growth (see Solow). The Chinese have latched on to US creativity to drive their economy (plus an investment rate of 45% vs. 20% for the US). In parallel the US went Crony Capitalist and its TFP went from 3% to .4%/year. Can a Crony capitalist US recover its productivity growth and can a State Capitalismt Chinese dictatorship be innovative without the West. The US under Trump is attempting to displace its currrent ruling elites. This will not happen in China. My guess is China has lost at trade and will lose at Economic productivity growth.

jk , says: May 17, 2019 at 8:43 pm
Sounds more like a pointless Pyrrhic victory. Tit-for-tat trade wars have many unintended consequences, can easily expand into other sectors, and ultimately consumers and employees will bear the burden.
david , says: May 17, 2019 at 8:51 pm
Americans' fear and hatred of China is so great that we are yearning for China's lost regardless of how it may harm Americans.

Take the latest "emergency order" to put Huawei in the "entity list" to ban it from purchasing American products. If implemented, it will cost American companies $11 billions of sales from Huawei, and lost of thousands of high tech and good quality jobs. If Huawei is destroyed, the 5G market will probably be picked up by Swedish and Finland companies, and the smart phones market by South Korean Samsung, not any US company. But who cares, as long as Huawei is destroyed, right?

Take a look of all opinion pages in the media and comments in the Internet, if the supply chain is moved from China to Vietnam, then it is a win for Americans, right? Who care whether Vietnamese can produce it as efficiently as Chinese or not, or whether Vietnam is also a communist country?

This *jihadic* style pursuit to destroy China is also blinding ordinary intelligent Americans of common sense about the relative strengths and weaknesses of both sides. This author, for example, ignores all the possible ways Chinese can hit back if they also decide to go the self-destructive ways or even "nuclear" (figuratively or literally) options. And yes, the options are not restricted to financial tool like US bonds only, e.g.

1. Stop selling rare earth to American companies – which means we can't even make F-35 fighters. The last congressional study finds that it will take at least 10 years for US to re-open our rare earth mine.

2. Start making the life of all American companies difficult in China – GM and Ford are selling more cars in China than in US, Apple has its 2nd largest market in China. The growth rate of China for these companies are higher than US.

3. Stop cooperating with US on geopolitical front, e.g. start helping North Korea to perfect their ICBM, or buying lots of oil from Iran, etc.

These are just random thoughts I come out from 2 minutes of brainstorming. I am very sure 1.4 billions people can think of many things much more deeply and creative than me. Have the author or any of the people in DC think through all the possibilities before shouting for war? Good luck if you think they do.

And rest assured when the dusk settles, ordinary Americans will NOT be any penny richer or our life any better.

This country has a long history of insecurity toward and racism against Asians. Sadly, the current fight proves that this ugly chapter has not close.

[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] Obama s Top FBI Lawyer Distances Himself From Steele Dossier As DOJ Investigation Looms

Notable quotes:
"... James Baker, meanwhile, told Lawfare's Benjamin Wittes last week that he's 'nervous' about the DOJ Inspector General's ongoing investigation into FBI/DOJ conduct surrounding the 2016 election. ..."
"... The Steele Dossier is the most amateurish piece of garbage they could think of. It was born out of some comments made by Trump during the debates when both he and his opponents started talking about hand size. ..."
"... When and if Barr and Horowitz get the information compiled, this is going to look worse than a school election of a class president for the 9th grade. Mostly testosterone and no where to put it. ..."
"... Ultimate CYA swamp creature. What ever happened to the "Comey Memo"? Has anybody actually seen it? Was it written on Windows? Can we see the metadata to prove when it was written? or was it penned on a bar napkin, and can be edited at any time. ..."
"... This guy is a lawyer. He owed a duty to inform the judge that his bosses were lying about the warrant. He owed a duty to counsel his bosses to make them stop what they were doing and consider if it was a violation. ..."
"... Unless he did those two things, he should go to jail and also be disbarred and also be subject to civil suits for those who had to pay attorney fees during the investigation. ..."
"... Why are they bending over backwards to protect the British, who were the real interferers in the American election. Clinton mob-CIA-MI6-Steele-Pablo Miller-Skripal-Steele-Clinton mob. ..."
"... Recall the Podesta email, re: DNC "hack": We're gonna make an example of this guy. So, they seem to know who it is that stole the emails, and they are going to "make an example" of him. And do recall the statement of Donna Brazile, who expressed fear for her own safety in the wake of the Seth Rich murder: "you don't know what these people are capable of". ..."
"... When listening to an account of an event on TV or written in a blurb on the internet, always ask, why do they want us to know this stuff? The answer is usually so they can hide what they are really doing. ..."
May 19, 2019 | www.zerohedge.com

Obama's Top FBI Lawyer Distances Himself From Steele Dossier As DOJ Investigation Looms

by Tyler Durden Sun, 05/19/2019 - 13:11 759 SHARES

James Baker - the Obama FBI's top attorney (general counsel) said on Friday that he was skeptical about the Steele dossier, and "concerned" about its veracity when the agency received it prior to the 2016 US election, according to the Daily Caller 's Chuck Ross.

" It was more information that we viewed, that I viewed, skeptically from the outset , and I was concerned about it and had a jaundiced eye, or looked at it with a jaundiced eye right from the outset," Baker told MSNBC 's Chuck Todd, adding "Steele was and had been a source that we thought was reliable. He's reporting all this information. It looks alarming. We took it seriously, but we tried to vet it. "

The dossier - a collection of memos compiled by an ex-British spy funded by Hillary Clinton's 2016 campaign and the DNC - was used by the FBI to obtain a Foreign Intelligence Surveillance Act warrant to spy on Trump campaign aide Carter Page. Steele alleged that Page provided the Trump campaign a Kremlin backchannel during the election.

Baker also told Todd that he thinks the FISA warrants against Page would have been granted without the dossier, and took a pregnant pause when asked if the dossier was used to obtain FISA warrants on other people - saying "I don't think I should comment on that, I'm not sure what else the government has confirmed," and adding " I don't want to confirm or deny anything about other potential FISA applications. "

Watch:

https://www.youtube.com/embed/ckBuIN5kz1w

Meanwhile, Obama's former intel chiefs are at odds over who exactly pushed the dossier .

According to Fox News , an email chain exists which indicates that Comey told bureau subordinates that Brennan insisted on the dossier's inclusion in the intelligence community assessment (ICA) on Russian interference . Also interesting is that the dossier was referred to as "crown material" in the emails - a possible reference to the fact that Steele is a former British spy.

In a statement to Fox, however, a former CIA official "put the blame squarely on Comey ."

Comey, meanwhile, has attacked Attorney General William Barr for investigating him, tweeting on Friday "The AG should stop sliming his own Department. If there are bad facts, show us, or search for them professionally and then tell us what you found."

Barr, has launched a wide-ranging investigation into FBI conduct during the 2016 election, making him public enemy #1 to the left . In a Friday interview with Fox News , Barr said that the use of the Steele Dossier in the FISA warrant was a "very unusual situation," especially one "that on its face had a number of clear mistakes and a somewhat jejue analysis. And to use that to conduct counterintelligence against the American political campaign would be a strange development."

https://www.youtube.com/embed/sZBb8uMoqdI?start=268

James Baker, meanwhile, told Lawfare's Benjamin Wittes last week that he's 'nervous' about the DOJ Inspector General's ongoing investigation into FBI/DOJ conduct surrounding the 2016 election.

Baker made clear that he wanted to speak "as openly as I possibly can" about the origin of the FBI's investigation into Donald Trump - " to reassure the American people that it was done for lawful, legitimate reasons, and was apolitical, " according to the Washington Examiner 's Jerry Dunleavy.

Things are getting hot in DC and it's only May...


youshallnotkill , 56 minutes ago link

Things you will never read here, but hey, this is from the "failing" NYT so clearly fake news ...

Anti-money laundering investigators at Deutsche Bank flagged to bank executives multiple suspicious transactions on President Donald Trump and Jared Kushner's accounts in 2016 and 2017.

Five current and former Deutsche Bank employees told the New York Times that after computer alerts flagged suspicious activity, the specialists would put together recommendations urging bank executives to report the activity to the Treasury Department.

However, executives refused to act on the recommendations and kept the reports from the Department.

Tammy McFadden, an ex-Deutsche Bank employee who reviewed such alerts, said she found that money had been moved from Kushner Companies to Russian individuals.

Amanita Virosa , 1 hour ago link

Was it Trump who joked that Gitmo will renamed Comey Island? Like Coney Island with the fun house replaced with the big house.

John_Coltrane , 3 hours ago link

Breaking: We now know positively that there was Russian collusion. But it was via Obama, the Demonrats and their lapdog propaganda apparatus the MSM, Trump was completely innocent. (Saul Alinsky-Always accuse your opponents of that for which you are guilty. Your students, Obuttboy and Killiary studied you well, sensei)

They used a CIA spy asset, Stephen Halper, to feed Russian disinformation via the commie traitor Brennan head of Obuttboy's CIA into their Demonrat Senate traitors who asked for an FBI investigation and that lying sack-0-**** Comey, head of the FBI, complied using the so-called Steele "dossier" to obtain an illegal FISA warrant(s) to spy on members of the Trump team such as Carter Page. Comey knew the dossier and the parallel constructed Brennan pack of lies were fiction yet put his signature on the FISA application anyway blinded by his hatred of Trump and his girly-man nature. They used parallel construction to give an air of credibility to the fictional script written by Glenn Simpson, head of Fusion GPS, employer of "hit by an ugly" stick Nellie Ohr and paid to Hilliary and the DNC to smear Trump. The script was written in 2007.

Want more details? Please listen to Dan Bongino's Friday show and laugh your ******* head off at these spygate idiots now caught naked as the tide recedes.

As Dan puts it so pithily, it's not James Bond, it's Bond, James. Its Gitmo for you morons and a Pulitzer to Dan Bongino. And yet the MSM seems not to be aware of this? How can that be? Perhaps, as the commies like to say the MSM needs to be deconstructed, literally!

Josef Stalin , 3 hours ago link

never trust ANYTHING amerikans say ... I am the default example after we saved the World from Nazism - something the amerikan rats are now funding and supporting - they betrayed me in 1945 and that traitor Gorby in 1986 with the NATO scam... and these parameters will ALWAYS into the future determine our level of trust with America ..... it will be ZERO

cryptohalo , 3 hours ago link

It's not Barr's FBI that would be slimed...it's Comey's FBI. But nice try, James.

RKae , 3 hours ago link

This is like watching a movie director, producers and actors blame each other for a flop. They all thought it was a great idea during pre-production, but after the critics take it apart and the public ignores it, they all turn on each other and say, "I knew this was a piece of **** from the start!"

oldanalyst , 3 hours ago link

Baker is lying. He should go to Leavenworth with the rest of the seditious conspirators.

AKKadian , 3 hours ago link

What gutless POS in DC! They don't mind leaking BS lies to the MSMutt's and taking bribes. DC is the biggest enemy the U.S. has in the entire world. Scam Lie Cheat Steal and are total nerd pussies.

ZD1 , 3 hours ago link

Arrest Obama, Hillary and all Democrat socialist traitors for their attempted coup.

TheCentralScrutinizer , 3 hours ago link

Yep.. Carter Page was such a "bad guy" that the FBI permitted him (and continues to do so) to walk around American and NEVER be arrested.. Yep.. that was a pretty strong amount of evidence you guys had there for that FISA warrant.. And you never told Trump either about this "Russian Mole" in his campaign as you're required to do (and as you did for the Chinese mole in Feinstein's office)..

Scrutinizer

OCnStiggs , 4 hours ago link

Bongino has the goods on them, in minute detail. https://bongino.com/ep-979-they-cant-keep-track-of-their-own-lies/

Glenn Simpson wrote the dossier with input from a Putin operative. They ran it through Steele simply to give it "credibility." Wheel out the guillotine and get it lubed up. This is gonna be a busy summer. NOTHING can stop what is coming. Nothing.

MrBoompi , 4 hours ago link

Dear Mr. Comey, there are numerous "bad facts" already out in public, many of them involving you, and many seem worthy of prison.

ducksinarow , 4 hours ago link

I have read many articles from many sources including reading the Mueller Report as it was released to the public and tedious it was.

I have come to the conclusions at this point that:

A. Many amateur actors not familiar with how to do counter intelligence were brought in by the Clinton campaign largely because no expert would have touched what she was trying to do.

B: No one can explain from the very beginning what happened, who knew what when, nor how they were going to answer for it when they got caught, if they got caught.

C. The Steele Dossier is the most amateurish piece of garbage they could think of. It was born out of some comments made by Trump during the debates when both he and his opponents started talking about hand size.

D. When and if Barr and Horowitz get the information compiled, this is going to look worse than a school election of a class president for the 9th grade. Mostly testosterone and no where to put it.

Mimir , 4 hours ago link

And yet FBI has said, that they took the Steele Report seriously because it confirmed a series of information, that FBi already had, but check every line of the report. What was the result of that FBI examination we don't know.

Amy G. Dala , 5 hours ago link

Yeah, right. Comey will email SUBORDINATES to go on record that it's not HIS idea . . .but we'll go with the dossier anyway. If you got a problem with Brennan, why not memorialize that in an email to Brennan?

Ultimate CYA swamp creature. What ever happened to the "Comey Memo"? Has anybody actually seen it? Was it written on Windows? Can we see the metadata to prove when it was written? or was it penned on a bar napkin, and can be edited at any time.

In an alternate universe, we would have Comey, Clapper and Brennan in adjacent rooms, two chairs a table and harsh lighting.

Ace006 , 5 hours ago link

Pretty rich for Comey to call for searching for facts professionally, like the clown car investigation under him was professional. Unh huh. Surrrre.

This Baker *** hat and Obongo and crew looovved the "dossier" and thought it was just the ticket to be used against Trump and his people. Just the most natural thing there was and oh so useful for their purposes. So WHAAAAT if the "dossier" stank like dead cow. Surrre. What Democrat DOESN'T want to pursue a decapitation strategy? And surrre the basis for one was right there in that socialist scumbag's "dossier." And, surrre, i believe Steele is no long were MI-6. Fisking Theresa May.

Surrre this *** hat was just brimming with effing skepticism and I'm surrre there are emails and memos expressing just that, his skepticism.

St. TwinkleToes , 5 hours ago link

I see parallels from the twenties with what's happening today. For example, Prohibition was meant to outlaw drinking. Instead, it made drinkers into outlaws. Breaking the law became commonplace. New York closed 15,000 legal saloons when prohibition began. Some 32,000 illegal speakeasy's replaced them. Upstanding citizens and mobsters became partners in crime, allied against federal agents in the battle for booze.

Today, that battle is against feds for truth and justice.

truthalwayswinsout , 5 hours ago link

This guy is a lawyer. He owed a duty to inform the judge that his bosses were lying about the warrant. He owed a duty to counsel his bosses to make them stop what they were doing and consider if it was a violation.

Unless he did those two things, he should go to jail and also be disbarred and also be subject to civil suits for those who had to pay attorney fees during the investigation.

jmNZ , 5 hours ago link

Why are they bending over backwards to protect the British, who were the real interferers in the American election. Clinton mob-CIA-MI6-Steele-Pablo Miller-Skripal-Steele-Clinton mob.

Had to be "buried" when Trump won, so MI6 took out Skripal and CIA took out Seth Rich.

Amy G. Dala , 5 hours ago link

Seth Rich and CIA? Don't think so. DNC has an army of lawyers, the kind that aren't in the phone book. They know lots of people who are willing to do things for a price.

Recall the Podesta email, re: DNC "hack": We're gonna make an example of this guy. So, they seem to know who it is that stole the emails, and they are going to "make an example" of him. And do recall the statement of Donna Brazile, who expressed fear for her own safety in the wake of the Seth Rich murder: "you don't know what these people are capable of".

CIA would involve too many people.

ducksinarow , 4 hours ago link

If this had not been an amateur job, we would still not know anything. There would be no investigation because the players would never have been identified like 95% of all counter intelligence work. Seth Rich was killed in plain sight as a message to some one else. He was probably the only innocent person involved at such a deep level.

When listening to an account of an event on TV or written in a blurb on the internet, always ask, why do they want us to know this stuff? The answer is usually so they can hide what they are really doing.

[May 19, 2019] Lawrence Wilkerson Warns The US Is Driving Down A Highway To War With China

Notable quotes:
"... More broadly, Wilkerson pegs the ramping up of confrontation with China as "all about keeping the [military-industrial] complex alive" that Wilkerson explains "the military was scared to death would disappear as we began to pay the American people back" a peace dividend at the end of the cold war. US government efforts against terrorism, explains Wilkerson, have also been used to ensure the money keeps flowing. ..."
May 19, 2019 | www.zerohedge.com

Authored by Adam Dick via The Ron Paul Institute for Peace & Prosperity,

Former Army Colonel Lawrence Wilkerson, who was chief of staff for Secretary of State Colin Powell in the George W. Bush administration, warns in a new The Real News interview with host Sharmini Peries that the United States government is driving down a "highway to war" with China -- a war for which Wilkerson sees no sound justification.

The drive toward war is not undertaken in response to a real threat posed by China to the people of America. Instead, argues Wilkerson, the US government is moving toward war for reasons related to money for both the military and the broader military-industrial complex, as well to advance President Donald Trump's domestic political goals.

Wilkerson, who is a member of the Ron Paul Institute for Peace and Prosperity's Academic Board, elaborates on the US military's money-seeking motivation to advance the new China scare, stating:

All of this right now, first and foremost, is a budget ploy. They want more money.

And that's largely because their personnel costs are just eating their lunch. And, second, it's an attempt to develop - and this has something to do with money too of course - another threat, another cold war, another feeding system .

The military just hooks up like it is hooking up to an intravenous, you know, an IV system and the money just pours out-slush fund money, appropriated money, everything else.

More broadly, Wilkerson pegs the ramping up of confrontation with China as "all about keeping the [military-industrial] complex alive" that Wilkerson explains "the military was scared to death would disappear as we began to pay the American people back" a peace dividend at the end of the cold war. US government efforts against terrorism, explains Wilkerson, have also been used to ensure the money keeps flowing.

Watch Wilkerson's complete interview here:

https://www.youtube.com/embed/42LauiK_rbY

* * *

Please donate to the Ron Paul Institute

[May 19, 2019] Google cuts ties with Huawei following trade blacklisting

May 19, 2019 | www.rt.com

Google has reportedly suspended its licences and product-sharing agreements with Chinese communications giant Huawei, as Washington accuses the company of spying for Beijing. The Silicon Valley tech giant has cut its business deals with Huawei that involve the transfer of hardware and software, Reuters and The Verge report. Following the move, Huawei will lose access to Android operating system updates, and its forthcoming smartphones will be shut out of some Google apps, including the Google Play Store and Gmail apps. The Chinese firm however will still have access to the open source version of the Android operating system.

We have confirmed this is genuine.

Huawei will only be able to use the public version of Android, and won't get access to proprietary apps and services from Google

Huawei will have to create their own update mechanism for security patches https://t.co/7eTi4JvWsE

-- Tom Warren (@tomwarren) May 19, 2019

Washington repeatedly accused Huawei of installing so-called 'backdoors' into its products on behalf of the Chinese government. The heads of six US intelligence agencies warned American citizens against using Huawei products last year, and the Chinese company's phones were banned from US military bases shortly afterwards.

[May 19, 2019] Why The Takedown Of Heinz-Christian Strache Will Strengthen The Right

Notable quotes:
"... 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. ..."
"... 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. ..."
"... 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 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. ..."
May 19, 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

[May 19, 2019] RF has been falsely accused in Salisbury; RF and Syria have been falsely accused in Douma, Khan Seikhoun and over MH17 tragedy. That means that NATO stages the war on RF by other means. RF should eventually respond. Gob bless President Putin, the RF military leaders and brave soldiers!

May 19, 2019 | russia-insider.com

VeeNarian (Yerevan) a year ago ,

Presumably, RF has been falsely accused in Salisbury. Presumably, RF and Syria have been falsely accused in Douma. Presumably, Russia and Syria have been falsely accused over Khan Seikhoun. Presumably, RF has been falsely accused and PUNISHED over the athletes drug doping. Presumably, RF has been falsely accused over MH17 tragedy. Presumably, the US/EU/NATO/GCC know all this, and still they carry on?

There can be only ONE reaction from President Putin.
ENOUGH IS ENOUGH!
NO MORE MR NICE GUY.

How this translates into action is up to him and the Russian people. Godspeed to the mighty Russian Federation, who have become MORE Christian than the US. (I observe this as a British Indian Hindu).

This reminds me of the moment when the Gita is revealed to Arjuna by Lord Krishna, on the verge of a war he had done everything to avoid. Lord Krishna revealed how Arjuna had to do his duty, his dharma, no matter what his attachment. Godspeed President Putin and the RF military leaders and brave soldiers!

[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] How Russiagate replaced Analysis of the 2016 Election by Rick Sterling

Highly recommended!
Notable quotes:
"... What he said is, 'I Donald Trump am going to be a champion of the working class I know you are working longer hours for lower wages, seeing your jobs going to China, can't afford childcare, can't afford to send your kids to college. I Donald Trump alone can solve these problems.' What you have is a guy who utilized the media, manipulated the media very well. He is an entertainer, he is a professional at that. But I will tell you that I think there needs to be a profound change in the way the Democratic Party does business. It is not good enough to have a liberal elite. I come from the white working class and I am deeply humiliated that the Democratic Party cannot talk to the people where I came from." ..."
"... when the Clinton team first learned that Wikileaks was going to release damaging Democratic National Party emails in June 2016, they "brought in outside consultants to plot a PR strategy for handling the news of the hack the story would advance a narrative that benefited the Clinton campaign and the Democrats: The Russians were interfering in the US election, presumably to assist Trump." ..."
"... After losing the election, Team Clinton doubled down on this PR strategy. As described in the book Shattered (p. 395) the day after the election campaign managers assembled the communication team "to engineer the case that the election wasn't entirely on the up and up . they went over the script they would pitch to the press and the public. Already, Russian hacking was the centerpiece of the argument." ..."
"... A progressive team produced a very different analysis titled Autopsy: The Democratic Party in Crisis . They did this because "the (Democratic) party's national leadership has shown scant interest in addressing many of the key factors that led to electoral disaster." The report analyzes why the party turnout was less than expected and why traditional Democratic Party supporters are declining. ..."
"... Since the 2016 election there has been little public discussion of the process whereby Hillary Clinton became the Democratic Party nominee. It's apparent she was pre-ordained by the Democratic Party elite. As exposed in the DNC emails, there was bias and violations of the party obligations at the highest levels. On top of that, it should now be clear that the pundits, pollsters and election experts were out of touch, made poor predictions and decisions. ..."
"... The 2016 election is highly relevant today. Already we see the same pattern of establishment bias and "horse race" journalism which focuses on fund-raising, polls and elite-biased "electability" instead of dealing with real issues, who has solutions, who has appeal to which groups. ..."
"... The establishment bias for Biden is matched by the bias against Democratic Party candidates who directly challenge Wall Street and US foreign policy. On Wall Street, that would be Bernie Sanders. On foreign policy, that is Tulsi Gabbard. With a military background Tulsi Gabbard has broad appeal, an inclusive message and a uniquely sharp critique of US "regime change" foreign policy. ..."
"... Blaming an outside power is a good way to prevent self analysis and positive change. It's gone on far too long. ..."
May 19, 2019 | dissidentvoice.org
An honest and accurate analysis of the 2016 election is not just an academic exercise. It is very relevant to the current election campaign. Yet over the past two years, Russiagate has dominated media and political debate and largely replaced a serious analysis of the factors leading to Trump's victory. The public has been flooded with the various elements of the story that Russia intervened and Trump colluded with them. The latter accusation was negated by the Mueller Report but elements of the Democratic Party and media refuse to move on. Now it's the lofty but vague accusations of "obstruction of justice" along with renewed dirt digging. To some it is a "constitutional crisis", but to many it looks like more partisan fighting.

Russiagate has distracted from pressing issues

Russiagate has distracted attention and energy away from crucial and pressing issues such as income inequality, the housing and homeless crisis, inadequate healthcare, militarized police, over-priced college education, impossible student loans and deteriorating infrastructure. The tax structure was changed to benefit wealthy individuals and corporations with little opposition. The Trump administration has undermined environmental laws, civil rights, national parks and women's equality while directing ever more money to military contractors. Working class Americans are struggling with rising living costs, low wages, student debt, and racism. They constitute the bulk of the military which is spread all over the world, sustaining continuing occupations in war zones including Afghanistan, Iraq, Syria and parts of Africa. While all this has been going on, the Democratic establishment and much of the media have been focused on Russiagate, the Mueller Report, and related issues.

Immediately after the 2016 Election

In the immediate wake of the 2016 election there was some forthright analysis. Bernie Sanders said , "What Trump did very effectively is tap the angst and the anger and the hurt and pain that millions of working class people are feeling. What he said is, 'I Donald Trump am going to be a champion of the working class I know you are working longer hours for lower wages, seeing your jobs going to China, can't afford childcare, can't afford to send your kids to college. I Donald Trump alone can solve these problems.' What you have is a guy who utilized the media, manipulated the media very well. He is an entertainer, he is a professional at that. But I will tell you that I think there needs to be a profound change in the way the Democratic Party does business. It is not good enough to have a liberal elite. I come from the white working class and I am deeply humiliated that the Democratic Party cannot talk to the people where I came from."

Days after the election, the Washington Post published an op-ed titled " Hillary Clinton Lost. Bernie Sanders could have won. We chose the wrong candidate ." The author analyzed the results saying , "Donald Trump's stunning victory is less surprising when we remember a simple fact: Hillary Clinton is a deeply unpopular politician." The writer analyzed why Sanders would have prevailed against Trump and predicted "there will be years of recriminations."

Russiagate replaced Recrimination

But instead of analysis, the media and Democrats have emphasized foreign interference. There is an element of self-interest in this narrative. As reported in "Russian Roulette" (p127), when the Clinton team first learned that Wikileaks was going to release damaging Democratic National Party emails in June 2016, they "brought in outside consultants to plot a PR strategy for handling the news of the hack the story would advance a narrative that benefited the Clinton campaign and the Democrats: The Russians were interfering in the US election, presumably to assist Trump."

After losing the election, Team Clinton doubled down on this PR strategy. As described in the book Shattered (p. 395) the day after the election campaign managers assembled the communication team "to engineer the case that the election wasn't entirely on the up and up . they went over the script they would pitch to the press and the public. Already, Russian hacking was the centerpiece of the argument."

This narrative has been remarkably effective in supplanting critical review of the election.

One Year After the Election

The Center for American Progress (CAP) was founded by John Podesta and is closely aligned with the Democratic Party. In November 2017 they produced an analysis titled " Voter Trends in 2016: A Final Examination ". Interestingly, there is not a single reference to Russia. Key conclusions are that "it is critical for Democrats to attract more support from the white non-college-educated voting bloc" and "Democrats must go beyond the 'identity politics' versus 'economic populism' debate to create a genuine cross-racial, cross-class coalition " It suggests that Wall Street has the same interests as Main Street and the working class.

A progressive team produced a very different analysis titled Autopsy: The Democratic Party in Crisis . They did this because "the (Democratic) party's national leadership has shown scant interest in addressing many of the key factors that led to electoral disaster." The report analyzes why the party turnout was less than expected and why traditional Democratic Party supporters are declining. It includes recommendations to end the party's undemocratic practices, expand voting rights and counter voter suppression. The report contains details and specific recommendations lacking in the CAP report. It includes an overall analysis which says "The Democratic Party should disentangle itself – ideologically and financially – from Wall Street, the military-industrial complex and other corporate interests that put profits ahead of public needs."

Two Years After the Election

In October 2018, the progressive team produced a follow-up report titled " Autopsy: One Year Later ". It says, "The Democratic Party has implemented modest reforms, but corporate power continues to dominate the party."

In a recent phone interview, the editor of that report, Norman Solomon, said it appears some in the Democratic Party establishment would rather lose the next election to Republicans than give up control of the party.

What really happened in 2016?

Beyond the initial critiques and "Autopsy" research, there has been little discussion, debate or lessons learned about the 2016 election. Politics has been dominated by Russiagate.

Why did so many working class voters switch from Obama to Trump? A major reason is because Hillary Clinton is associated with Wall Street and the economic policies of her husband President Bill Clinton. The North American Free Trade Agreement (NAFTA), promoted by Bill Clinton, resulted in huge decline in manufacturing jobs in swing states such as Michigan, Ohio and Pennsylvania. Of course, this would influence their thinking and votes. Hillary Clinton's support for the Trans Pacific Partnership was another indication of her policies.

What about the low turnout from the African American community? Again, the lack of enthusiasm is rooted in objective reality. Hillary Clinton is associated with "welfare reform" promoted by her husband. According to this study from the University of Michigan, "As of the beginning of 2011, about 1.46 million U.S. households with about 2.8 million children were surviving on $2 or less in income per person per day in a given month The prevalence of extreme poverty rose sharply between 1996 and 2011. This growth has been concentrated among those groups that were most affected by the 1996 welfare reform. "

Over the past several decades there has been a huge increase in prison incarceration due to increasingly strict punishments and mandatory prison sentences. Since the poor and working class have been the primary victims of welfare and criminal justice "reforms" initiated or sustained through the Clinton presidency, it's understandable why they were not keen on Hillary Clinton. The notion that low turnout was due to African Americans being unduly influenced by Russian Facebook posts is seen as "bigoted paternalism" by blogger Teodrose Fikremanian who says, "The corporate recorders at the NY Times would have us believe that the reason African-Americans did not uniformly vote for Hillary Clinton and the Democrats is because they were too dimwitted to think for themselves and were subsequently manipulated by foreign agents. This yellow press drivel is nothing more than propaganda that could have been written by George Wallace."

How Clinton became the Nominee

Since the 2016 election there has been little public discussion of the process whereby Hillary Clinton became the Democratic Party nominee. It's apparent she was pre-ordained by the Democratic Party elite. As exposed in the DNC emails, there was bias and violations of the party obligations at the highest levels. On top of that, it should now be clear that the pundits, pollsters and election experts were out of touch, made poor predictions and decisions.

Bernie Sanders would have been a much stronger candidate. He would have won the same party loyalists who voted for Clinton. His message attacking Wall Street would have resonated with significant sections of the working class and poor who were unenthusiastic (to say the least) about Clinton. An indication is that in critical swing states such as Wisconsin and Michigan Bernie Sanders beat Hillary Clinton in the Democratic primary race.

Clinton had no response for Trump's attacks on multinational trade agreements and his false promises of serving the working class. Sanders would have had vastly more appeal to working class and minorities. His primary campaign showed his huge appeal to youth and third party voters. In short, it's likely that Sanders would have trounced Trump. Where is the accountability for how Clinton ended up as the Democratic Party candidate?

The Relevance of 2016 to 2020

The 2016 election is highly relevant today. Already we see the same pattern of establishment bias and "horse race" journalism which focuses on fund-raising, polls and elite-biased "electability" instead of dealing with real issues, who has solutions, who has appeal to which groups.

Mainstream media and pundits are already promoting Joe Biden. Syndicated columnist EJ Dionne, a Democratic establishment favorite, is indicative. In his article " Can Biden be the helmsman who gets us past the storm? " Dionne speaks of the "strength he (Biden) brings" and the "comfort he creates". In the same vein, Andrew Sullivan pushes Biden in his article " Why Joe Biden Might be the Best to Beat Trump ". Sullivan thinks that Biden has appeal in the working class because he joked about claims he is too 'hands on'. But while Biden may be tight with AFL-CIO leadership, he is closely associated with highly unpopular neoliberal trade deals which have resulted in manufacturing decline.

The establishment bias for Biden is matched by the bias against Democratic Party candidates who directly challenge Wall Street and US foreign policy. On Wall Street, that would be Bernie Sanders. On foreign policy, that is Tulsi Gabbard. With a military background Tulsi Gabbard has broad appeal, an inclusive message and a uniquely sharp critique of US "regime change" foreign policy. She calls out media pundits like Fareed Zakaria for goading Trump to invade Venezuela. In contrast with Rachel Maddow taunting John Bolton and Mike Pompeo to be MORE aggressive, Tulsi Gabbard has been denouncing Trump's collusion with Saudi Arabia and Israel's Netanyahu, saying it's not in US interests. Gabbard's anti-interventionist anti-occupation perspective has significant support from US troops. A recent poll indicates that military families want complete withdrawal from Afghanistan and Syria. It seems conservatives have become more anti-war than liberals.

This points to another important yet under-discussed lesson from 2016: a factor in Trump's victory was that he campaigned as an anti-war candidate against the hawkish Hillary Clinton. As pointed out here , "Donald Trump won more votes from communities with high military casualties than from similar communities which suffered fewer casualties."

Instead of pointing out that Trump has betrayed his anti-war campaign promises, corporate media (and some Democratic Party outlets) seem to be undermining the candidate with the strongest anti-war message. An article at Fairness and Accuracy in Reporting (FAIR) says, " Corporate media target Gabbard for her Anti-Interventionism, a word they can barely pronounce ."

Russiagate has distracted most Democrats from analyzing how they lost in 2016. It has given them the dubious belief that it was because of foreign interference. They have failed to analyze or take stock of the consequences of DNC bias, the preference for Wall Street over working class concerns, and the failure to challenge the military industrial complex and foreign policy based on 'regime change' interventions.

There needs to be more analysis and lessons learned from the 2016 election to avoid a repeat of that disaster. As indicated in the Autopsy , there needs to be a transparent and fair campaign for nominee based on more than establishment and Wall Street favoritism. There also needs to be consideration of which candidates reach beyond the partisan divide and can energize and advance the interests of the majority of Americans rather than the elite. The most crucial issues and especially US military and foreign policy need to be seriously debated.

Blaming an outside power is a good way to prevent self analysis and positive change. It's gone on far too long.

Rick Sterling is an investigative journalist who grew up in Canada but currently lives in the San Francisco Bay Area of California. He can be reached at rsterling1@gmail.com . Read other articles by Rick .

[May 19, 2019] Intel agencies of the UK and US are guilty of fabricating evidence, breaking the laws (certainly of the targeted countries, but also of the UK and US), providing fake analysis and operating as evil actors on the dark side of humanity

Highly recommended!
Notable quotes:
"... 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

Couple of factors not mentioned. one is Israel and the other is more sinister still and tied to the conclusions to be drawn from the Mueller report.

it may be true that Skripal helped Steele with some elements of the dossier compiled by Steele, via SKripals handler Pablo Miller. It may be true that Skripal went "stir crazy" and an attempt was made to silence him and his daughter - permanently, because they simply cold not be trusted. a similar motivation could be drawn up against Russia - with the two Russians visiting Salisbury used as diversionary "stool pigeons". It may be true that the "poisoning" was self inflicted and was in fact a murder/suicide attempt as a result of depression along the ines "what's the point of it all".

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.

what ought to be apparent is

- the same tactics used by the special prosecutor to investigate the "Russia collusion" smoke screen erected by the howler monkeys in the US intel agencies (aided and abetter by howler monkeys in UK intel agencies) to stymie the US executive branch (Trump) are likely to be used by the the UK government and some more as well - in true Le Carre fashion, but with much dumber and less principled actors than Smiley's people.

these tactics prevented (and continue to prevent) investigation and prosecution of heinous corruption within the obama administration of the previous 8 years - these howler monkey intelligence agency tactics include(d) entrapment, honeypots, racketeering, blackmail, de facto kidnapping (in the case of Skripals), bribery, wire fraud, unauthorized wire-tapping, breach of authorized intel agency activities (like the FBI operating overseas and the CIA operating domestically in the US, false and unverified claims in FISA warrants, NSA providing unauthorized information to the CIA and FBI etc)

- given the howler monkey activities of the alphabet soup, it is not beyond the imagination to draw parallels with the CIA's reporting and analysis of situations on the ground wherever they operate to provide intel ahead of military activity. the DOD has already proved complicit by hiring Halper (for hundreds of thousands of dollars) to assist with the entrapment of Trump operative Papadopoulos. Mifsud is likely a CIA, not a Russian, asset.

- given that we have ample evidence of the howler monkeys in the alphabet soup seeking to facilitate a coup against a sitting US president, it is certainly plausible that - as with the US goverment sponsoring the mujaheedin, isis and al qaeda in afghanistan to fight the russians in late 80's early 90's, Iraq yellow cake and WMD - that the howler monkeys paid the white helmets to ovethrow assad and foment civil war in Syria - thus causing the migration of some 5 million syrians into europe, iraq, turkey, jordan, turkey and lebanon.

https://en.wikipedia.org/wiki/White_Helmets_(Syrian_Civil_War)

so , the case is that howler monkey activity in intel agencies of the UK and US (add (F)rance to get FUKUS) are guilty of the manufacture of human conflict by fabricating evidence, breaking the laws (certainly of the targeted countries, but also of the UK and US), providing shitty analysis (howler monkeys are only good at swinging in trees and flinging ****) and generally operating as evil actors on the dark side of humanity.

this can only be brought into sharp relief if howler monkey activities were instead shown to be powers for good rather than the geo-political risks that persist in Iran, North Korea, Venezuela, Yemen, Libya and so on and so forth.

Never mind how much past conflicts in Iraq, Syria, Libya, Afghanistan and so on relied on evidence and analysis thrown at us by the howler monkeys in the tree tops, how much of what we we are doing now is a fabrication causing needless suffering by civilian (not politicians or military engaged in conflict) populations?

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.

there are equivalents of strzok, page, ohr right throughout the US and UK government "machines" operating overseas. think about that. crimes exposed by Barr et al in the US - against a sitting president - are replicated wherever howler monkeys operate overseas as well.

[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] The Realities Of Trump's Trade War VICE on HBO

Interesting take of Trump policies. Trump is trying to replace neoliberalism with "national neoliberalism"
May 19, 2019 | www.youtube.com

Free Ops , 2 days ago

Decided by someone who declared bankruptcy 3 times lol

Richard Mycroft , 1 week ago div tabindex="0" role="arti

cle"> "Without Walmart there is no middle class or lower class..." What a load of tripe. Walmart pays middle class wages for probably 4 people at each store, the rest get poverty level wages and many are on public assistance while working at Walmart. I've always thought Laffer was a loon but, that comment just proves it. He is talking like there is no economy outside of Walmart, and that is not the case at all. Walmart took on the job of being China's distributor for China - and helped to get factories moved from the US to China. Walmart is most certainly no hero in the story of American economics.

VICE News , 4 months ago

"Thinking that tariffs are the magical tool that is bringing the entire supply chain, the entire ecosystem, to the United States is a task that's larger than even Apple could accomplish," Wiens told VICE News. WATCH NEXT: The Hidden Homelessness Crisis In California - http://bit.ly/2E1fnUK

[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 19, 2019] The Real Risk Of The Trade War

Notable quotes:
"... Negotiating with countries is different from the wheeling and dealing world of New York real estate. This should be especially clear with a nation-first politician like Donald Trump. ..."
"... Where making maximum demands on other parties might work in New York, it's much less likely if one is dealing with proud, independent nations - that should have been the lesson from the North Korea fiasco. ..."
"... Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. ..."
May 16, 2019 | seekingalpha.com

by: Shareholders Unite Shareholders Unite Small-cap, macro, value, momentum Shareholdersunite (11,300 followers) Summary It is difficult to see the Chinese caving to the demands of the Trump government, which seem to involve a wholesale change of China's economic model.

Either some middle ground is found or we risk a serious escalation with multiple risks to the state of the world economy, with many known and unknown facilities.

The end state could be a wholesale decoupling of the American and Chinese economies, and while some would applaud such an outcome, it's unlikely to be better than what we've got.

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, we don't know.

Trade tensions have been taken way too far when the government slapped tariffs on Canadian steel exports because of national security concerns, but in the case of China, there are some legitimate concerns. Mind you, these concerns don't involve:

This doesn't look particularly mercantilist:

(Source: Trading Economics )

Negotiating with countries is different from the wheeling and dealing world of New York real estate. This should be especially clear with a nation-first politician like Donald Trump.

Where making maximum demands on other parties might work in New York, it's much less likely if one is dealing with proud, independent nations - that should have been the lesson from the North Korea fiasco.

Just as there is one thing worse than a severe economic recession, which is caving to US pressure for the Iranian ayatollas, the same holds for Chinese politicians in charge of policy.

It's true that the pain from the escalation in the trade war is probably significantly larger in China compared to the US, but that doesn't make them more likely to be the first to cave, especially considering that what the US administration seems to demand is a wholesale change of China's economic model . That's never going to happen. Since there are no free elections, they can endure the pain for longer, and much fewer people own stocks, so even while the sell-off in China might be worse, it's hitting much fewer people.

In fact, caving to US demands, or even being seen to be caving, might well be a one-way ticket to political oblivion. Which is why China's leaders called President Trump's bluff. Contrast this with the situation in the US.

Trade experts like Krugman argue that the short-term economic impact as such on the US economy is fairly moderate, and who are we to disagree? However, a further escalation isn't likely to go by unnoticed, and there is this ephemeral concept called "confidence", of which the stock market might be one of the best indicators:

The market is already reeling, and this could become uncomfortable pretty soon for a president who prides himself on the rally in the markets.

The real danger

The risk is that this becomes a protracted conflict with each party digging in, egged on by heated domestic rhetoric. The longer this lasts, the greater the following risks:

Sentiment is turning, and at a certain point, this can very well start to affect consumption, investment, and lending decisions in the real world. We're not there yet, but look how the sell-off at the end of last year cowered the Fed into one of the more spectacular retreats in policy. This wasn't because of the market sell-off itself but because of the increasing signs that sentiment could hit the real economy, even if much of the more immediate risks were abroad.

Moreover, in a highly leveraged financial system, you never know what you're going to find when the investor flows recede. Things can go very fast here. Look how Argentina was able to sell a 100-year bond in 2016, only to be hit by the receding flows pretty soon after.

Another real risk is a substantial yuan depreciation . It's the most effective way the Chinese can absorb the direct tariff cost on their competitiveness, but it runs the risk of becoming a self-fulfilling prophesy.

The markets have already twice succumbed to yuan depreciation scares, in 2015 and at the start of 2016, and the PBoC spent $1 trillion of its $4 trillion reserves plus draconian capital controls to stop the rot.

We're not talking hypotheticals here - guess when that gap-up happened? On the day of the Trump tweets announcing the 25% tariffs:

A substantial yuan depreciation will risk inserting a major deflationary blow to the world economy as it exports the effects of the US tariffs on China to the rest of the world.

Given the shaky state of the eurozone, we're not relishing this prospect at all. We have long argued that the eurozone is one downturn away from disintegration, with Italy as its focal point.

Italy is already in a recession and has a dysfunctional government consisting of a left-wing and right-wing populist party which are constantly bickering. What's more, it has unsustainable debt dynamics and a potential banking doom loop, should the debt dynamics trigger a market selloff, and has no lender of last resort.

With all the debt and leverage in the world economy, it's a bit like riding a bicycle - you have to keep cycling to stop falling over.

Decoupling

While the direct monetary impact of the tariffs is fairly moderate (it's a modest, albeit highly regressive, tax increase), another likely consequence is a further relocation of supply chains and decoupling of the US and Chinese economies.

We have already read numerous company CCs which described rerouting supplies from China, albeit not usually back to the US, and we're not imagining stuff. From Monday's issue of DigiTimes:

If 10% tariffs can do that, 25% of tariffs will accelerate this and the next round, where the US levies tariffs on all Chinese imports even more.

Some within the US administration seems to relish this, as it weakens China economically, but a hard Chinese landing won't pass the US unnoticed, and the end result could very well be two competing economic blocks and a new sort of cold war.

One of the very first economic measures the Trump government took was to get the US out of the TPP, which not only gave up a lot of leverage over China, but the mostly ASEAN countries who are part of the TPP (without the US) are now firmer in China's orbit as a result, and they will have unenviable choices to make in terms of their future alignment.

It's also unfortunate that Trump has been waging trade wars on multiple fronts (see here for an overview ), alienating many partners in the process.

Now might be as good a time as any to remind people of the unpopular thesis that trade isn't a zero-sum game and that both the US and China have greatly benefited from their economic integration the past couple of decades.

The US got increased exports as well - not as spectacular as the Chinese exports to the US, but this is in part an optical illusion. Much of China's exports to the US contain value added produced elsewhere, even from the US itself:

94377_BII_COTW_040218_v3_blog

(Source: BlackRock )

You see that less than half of the value added of Chinese electronics export to the US is actually produced in China itself. The iPhone is a classic example:

In the case of the Apple iPhone, this means that China's exports balance accounts for the full $500 iPhone value, when China adds only approximately $15 to $30 of the value to the phone. Most of the iPhone value accretes to Samsung in Korea ($150) and to Apple - the brand owner and engineer. This highlights how the normal accounting of trade flows is inherently distorted under the current trade-deficit estimates.

(Source: CNBC )

Yes, the US has lost manufacturing jobs as a result, but it failed to compensate those who lost from trade like other countries have (via massive active labor market policies, for instance in the Nordic countries, where there is little in the way of an industrial waste land as a result).

The US has also gained. It found willing buyers for its Treasuries, keeping interest rates low, cheap consumer goods, keeping inflation low - which allowed the Fed to keep low interest rates, and which in turn increased economic growth and employment.

It's not perfect, and we're not blind to China's IP theft and the conditions it places on American companies operating in the country. But China's rise has propelled half a billion people out of poverty and turned them into eager consumers of US agricultural, cultural and high-tech products.

Conclusion

While a number of American grievances are right, the Trump administration seems to want a wholesale sellout of China, abandoning its economic model. That's not going to happen, and even less so because they also antagonized potential allies, like ASEAN countries, the EU and Canada.

There are two choices here: either some middle ground is found or this could spiral out of control, with major economic risks involved and a wholesale decoupling of the Chinese and American economies. Economics 101 argues quite clearly that that world is unlikely to be better than the one we have, despite all the imperfections of the latter.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

[May 19, 2019] Explaining the US China trade war

Essentially Trump is trying to replace neoliberals with "national neoliberalism"
Apr 29, 2019 | www.youtube.com

What if, instead of the U.S. and China battling it out on trade--it was two classes trading cards? We explain the trade war.

"Trade wars are good and easy to win," President Donald J. Trump famously tweeted. But how would one really impact everyday Americans?

[May 19, 2019] US pressure on Huawei

33 out 90 suppliers of Huawei are US companies. If Huawei do not buy from them who will buy them? It's two way street.
Trump is breaking neoliberalism createing two camps of neoliberal countries hostile to each other. Potential partners for China are Russia, Turkey, Syria, Iraq, Iran, Pakistan and North Korea so this would be a weaker, but still formidable in economic and military capacity block.
May 16, 2019 | www.youtube.com

On Wednesday, U.S. President Donald Trump issued an executive order barring U.S. firms from using telecom equipment made by companies accused of being a national security risk; this includes Chinese tech giant Huawei. The U.S. Commerce Department questioned whether Huawei will be able to continue purchasing components from its American suppliers. In response, the Chinese Commerce Ministry said on Thursday

Philip Yap , 1 day ago

Huawei will survive with supply chain alternatives and reengineering designs, it will make Huawei stronger with better products. American high tech products and parts suppliers can wait until American companies come up with design to utilise their products, hopefully not long enough to cripple all these high tech parts manufacturers.

Francoise Loffler , 8 hours ago

Huawei is an EXCELLENT PHONE MUCH BETTER THAN APLE...I have both and can compare them...

[May 18, 2019] If Washington were able to control everything, including "Big Prize" Iran, it would be able to dominate all Asian economies, especially China. Trump even said were that to happen, "decisions on the GNP of China will be made in Washington."

May 18, 2019 | www.moonofalabama.org

Peter AU 1 , May 18, 2019 2:15:40 AM | link

Without the oil, Trump has lost. Pepe Escobar is starting to get the picture

https://www.strategic-culture.org/news/2019/05/17/the-dead-dont-die-they-march-to-war/

"If President Trump had ever read Mackinder -- and there's no evidence he did -- one might assume that he's aiming at a new anti-Eurasia integration pivot centered on the Persian Gulf. And energy would be at the heart of the pivot.

If Washington were able to control everything, including "Big Prize" Iran, it would be able to dominate all Asian economies, especially China. Trump even said were that to happen, "decisions on the GNP of China will be made in Washington."...

...Arguably the key (invisible) takeaway of the meetings this week between Foreign Ministers Sergey Lavrov and Wang Yi, and then between Lavrov and Pompeo, is that Moscow made it quite clear that Iran will be protected by Russia in the event of an American showdown. Pompeo's body language showed how rattled he was.

What rattled Pomp: "Any use of nuclear weapons against Russia or its allies, be it small-scale, medium-scale or any other scale, will be treated as a nuclear attack on our country. The response will be instant and with all the relevant consequences,"

Trump may not have read Mackinder but Kissinger sure would have.

[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] Excuse the interruption. John Bolton has been shot!!!

May 18, 2019 | www.moonofalabama.org

dh , May 18, 2019 12:06:33 AM | link

Excuse the interruption. John Bolton has been shot!!!

"WASHINGTON -- Bursting through the Congressional chamber doors while moaning and clutching his shoulder, John Bolton reportedly stumbled into the Capitol building Friday claiming that he'd been shot by Iran."

https://politics.theonion.com/bleeding-john-bolton-stumbles-into-capitol-building-cla-1834847900

[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] Trade War US to Pay Heavy Price for Underestimating China Chinese Businessman

Notable quotes:
"... US Tariffs Have Nothing to Do With Competition, These are Steps to Contain China ..."
"... Or do they want to cut off all opportunities for China's future development? In my opinion, the relevant measures that the Americans have been initiating since the very beginning of the trade war to the present day are most likely real steps to contain China rather than some form of sanctions. This is a desire to hinder China's development in various spheres, specifically in trade, economic development, industrial development, science and technology, in the financial sphere and even in the area of human resources in China. They want to hamper our development on all sides. ..."
"... You might know that we used to have the popular concept of the so-called "hybrid war" but I would not describe the behaviour of Americans using this term. They just want to cut off all of China's development opportunities. They want to limit our ability to thrive as much as possible. ..."
"... Today I heard you talking about Russia, about the principles of preserving your development and sovereignty, I agree with that. The geopolitical situation is different for everyone, the history is different. There may be differences in how countries approach dealing with issues. ..."
"... The advantage of the United States is its hegemony in the global financial system. The second advantage is the strong alliance system that was formed after the Second World War and the Cold War. And another one is a still high level of weapons development in the world. ..."
"... Over the past decades, Americans have repeatedly initiated hostilities, and acute social inequality has flared up inside the country. Today, hegemony in the ideological system is being lost; and some countries and regions' confidence in the USA is being lost. ..."
May 16, 2019 | sputniknews.com

... ... ...

Dmitry Kiselyov, the general director of Rossiya Segodnya International Information Agency, discussed the recent escalation in the Sino-American trade war with Kong Dan, the former chairman of CITIC Group; Zhang Weiwei, a Chinese professor of international relations at Fudan University and a senior research fellow at the Chunqiu Institute; and Li Shimo, an investor and billionaire, founder and managing director of Chengwei Capital, owner of many US Silicon Valley companies.

US Tariffs Have Nothing to Do With Competition, These are Steps to Contain China

Dmitry Kiselyov: What resources does China have?

Kong Dan: Without a trade war, our view of the United States would be superficial; now we know the other side as well. I, as a representative of business circles, do not really understand the subtleties of what the Americans want. Do they just think that Chinese development is unacceptable for them?

Or do they want to cut off all opportunities for China's future development? In my opinion, the relevant measures that the Americans have been initiating since the very beginning of the trade war to the present day are most likely real steps to contain China rather than some form of sanctions. This is a desire to hinder China's development in various spheres, specifically in trade, economic development, industrial development, science and technology, in the financial sphere and even in the area of human resources in China. They want to hamper our development on all sides.

Dmitry Kiselyov: But is it hostile?

Kong Dan: I would call this approach competition. But competition can be different: hostile, non-hostile

READ MORE: Strategist: American Producers, Consumers to Pay for US-China Tariff Tit-for-Tat

China's Two Main Advantages in Trade War With US

Dmitry Kiselyov: Competition without rules is animosity

Kong Dan: You might know that we used to have the popular concept of the so-called "hybrid war" but I would not describe the behaviour of Americans using this term. They just want to cut off all of China's development opportunities. They want to limit our ability to thrive as much as possible.

China May Regulate Energy Imports from US Amid Trade Row Competition has various forms or different aspects. I also have a counter-question for you, how do Russians assess the nature of those sanctions measures that the Americans have implemented against Russia?

The United States considers us its adversaries. They previously included Russia, China, Iran, and North Korea on their blacklist, a list of terrorist forces. And China is first on the list. Are we hostile to them?

Today I heard you talking about Russia, about the principles of preserving your development and sovereignty, I agree with that. The geopolitical situation is different for everyone, the history is different. There may be differences in how countries approach dealing with issues.

I previously worked as the head of the largest state-owned company in China, so, of course, I understand what kind of mission one carries on his/her shoulders. I am willing to make efforts to stimulate the development of the Russian-Chinese partnership as a whole; I think there is still a lot to do in this direction. The US underestimates the potential of President Putin and Russia, China and President Xi Jinping. They will pay a heavy price for it.

I would like to name two advantages of the trade war for us.

Why China is Likely to Emerge Victorious in Trump-Driven Trade War

Dmitry Kiselyov: You said you have confidence that China will emerge victorious in this trade war, what does this victory mean? When will it come?

Kong Dan: Trump has said many times that he can hit our stock market to destroy it. As for us, we are doing everything well, we are successfully organising work, and we are looking for ways for rapid development in recent years. Our goal of a 100-year-old rebirth of the nation can be achieved -- and that is our victory Of course, we understand that the United States wants to impede our development. If they want to destroy us then I think they will fail. Only in their dreams!

Zhang Weiwei: I support Mr Kong's view that the Chinese consumer market is the largest in the world! Especially, in the field of innovation. And if one leads the battle with such colossal markets, then the initiators will surely fail .

READ MORE: US Treasury Chief to Plan for Trade Meeting in China Soon

'If US Continues to Maintain Hegemony, It Will Suffer Heavy Losses'

Dmitry Kiselyov: What will then become of the defeated United States?

Kong Dan: It is very hard to explain all this only in military terms. China neither wants to seize the United States nor does it want to take a dominant position like the United States. We simply do not want the United States to cut off all the opportunities for our country's development.

Li Shimo: I would like to note that in the course of a trade war, each of the parties has its own strengths and weaknesses. Our advantage is that we have a strong political system. The second one is social cohesion. The third one, as has already been stated, China has quite large domestic markets. The fourth one, China is the world's largest trading country and also the largest trading nation in the history of mankind.

China to Emerge Victorious From Trade War With US – Foreign Ministry Unlike ours, the American political system has fallen into disarray. American society is split ; the "social contract" has failed. The political and economic elite have gradually lost their credibility and reputation.

The advantage of the United States is its hegemony in the global financial system. The second advantage is the strong alliance system that was formed after the Second World War and the Cold War. And another one is a still high level of weapons development in the world.

However, the United States and China have different development goals. China is simply looking for suitable paths to future accelerated development. But the US has a dilemma. Previously, there was a different situation, there was hegemony -- a very important driving force, a very important pillar, the so-called "soft power", and particularly they had ideological dominance. Over the past decades, Americans have repeatedly initiated hostilities, and acute social inequality has flared up inside the country. Today, hegemony in the ideological system is being lost; and some countries and regions' confidence in the USA is being lost.

© Sputnik / Marina Lisceva Boeing Calls For Limits to US Tariffs Over EU Subsidies

Therefore, if they now wish to continue to maintain hegemony, they will suffer heavy losses. But if they back down from it -- for instance, Trump wants to abandon ideological dominance -- it will turn into a power struggle in its purest form. This will lead to a loss of ideological advantage in the international arena.

How to assess the outcome of the battle? I would suggest that you read the 19th National Congress of the Communist Party of China report delivered by President Xi Jinping. In it, he outlined two challenges: the first one -- 2035, the second one -- 2049. These two goals are quite clear and realistic If we can complete these tasks, then the victory will be ours.

China's Three Future Milestones: 2021, 2035, 2049

Dmitry Kiselyov: What are these challenges?

Kong Dan: China has two development goals for the current century. The first is that by 2021 when the CPC will celebrate its 100th anniversary, it will fully and comprehensively build a moderately prosperous society in China. Another goal by 2049, when it will be 100 years since the founding of the PRC, China should reach the level of the most advanced developed countries. Moreover, there is another intermediate task between these two goals of the current century -- by 2035 China has to move into the category of moderately developed countries.

Zhang Weiwei: China borrowed its methodology and planning practices from the USSR. However, over the past decades, we have brought a lot of innovation into this process. Now it is no longer the old decision-making but strategic and guiding planning. The Americans could see that over the past 40 years China has been fulfilling all its five-year plans ahead of schedule, and that frightened them. If we are talking about how the China-US trade war will end, then personally I would like to quote Americans who say: "if you can't beat them, join them".

READ MORE: China May Regulate Energy Imports from US Amid Trade Row

China Presents New Model of Development as Western & Soviet Models Failed

Dmitry Kiselyov: How many fingers are needed to describe the Chinese model, and what in fact is that, if we are talking about the alternative?

Zhang Weiwei: The Chinese Model of Development has several features. First, the leading ideology must be based on real facts. "Practice is the sole criterion of truth". As a result, we found that a developing country, such as China, needs to carry out modernisation. Looking at the rest of the world, it becomes clear that the Western model is not successful. The Soviet model also did not prevail. Therefore, Deng Xiaoping said that we need to follow our own path. We did not fall into the trap of "colour revolutions", we were looking for the path we needed based on reality. That is the key thing.

No US LNG Exports to China in Recent Months as Trade War Reaches Peak - Reports

I would like to add a little bit. If we talk about reforms in socialist countries, we can name two basic models.

Reforms according to the Chinese model are characterised by balance, prudence, and sustainability. We have carried out bold economic reforms, built a market economy, and joined the process of globalisation. However, we treat political reforms with caution and prudence; everything should serve economic reforms, and, ultimately, improve people's living standards.

The American model provides for the concept of political equality "One person, one vote", a multiparty system for governing a country. Strictly speaking, it only started working in 1965. The Chinese model began to take shape in 1978. Their starting points are more than ten years apart. Of course, they can compete with each other but I consider the Chinese model to be more successful and attractive; and I have already been talking about this for 20 years.

The views and opinions expressed by the speakers and the contributor do not necessarily reflect those of Sputnik.

[May 18, 2019] China Downplays Chances for Talks, Pledges Economic Defense

May 18, 2019 | www.bloomberg.com

China's state media signaled a lack of interest in resuming trade talks with the U.S. under the current threat of higher tariffs, while the government said stimulus will be stepped up to buttress the domestic economy.

Without new moves that show the U.S. is sincere, it is meaningless for its officials to come to China and have trade talks, according to a commentary by the blog Taoran Notes, which was carried by state-run Xinhua News Agency and the People's Daily, the Communist Party's mouthpiece. The Ministry of Commerce spokesman said Thursday he had no information about any U.S. officials coming to Beijing for further talks.

U.S. equities fell on concern that talks between the world's two largest economies have stalled. The Shanghai Composite Index also declined. "If the U.S. doesn't make concessions in key issues, there is little point for China to resume talks," said Zhou Xiaoming, a former commerce ministry official and diplomat. "China's stance has become more hard-line and it's in no rush for a deal" because the U.S. approach is extremely repellent and China has no illusions about U.S. sincerity, he said. No Rush for a Deal

According to Zhou, the commerce ministry spokesman on Thursday effectively ruled out talks in the near term. In comments to the media, ministry spokesman Gao Feng said that China's three major concerns need to be addressed before any deal can be reached, adding that the unilateral escalation of tensions in Washington recently had "seriously hurt" talks.

The U.S. has been talking about wanting to continue the negotiations, but in the meantime it has been playing "little tricks to disrupt the atmosphere," according to the Taoran commentary on Thursday night, citing Trump's steps this week to curb Chinese telecom giant Huawei Technologies Co.

"We can't see the U.S. has any substantial sincerity in pushing forward the talks. Rather, it is expanding extreme pressure," the blog wrote. "If the U.S. ignores the will of the Chinese people, then it probably won't get an effective response from the Chinese side," it added.

The blog reiterated China's three main concerns for a deal are tariff removal, achievable purchase plans and a balanced agreement text, as first revealed by Vice Premier Liu He. They mark the official stance as much as the will of the Chinese public, it wrote.
"If anyone thinks the Chinese side is just bluffing, that will be the most significant misjudgment" since the Korean War, it said.

Read: China Vows 'People's War' as Trade Fight Takes Nationalist Turn

In addition to putting the Taoran commentary on WeChat, the People's Daily newspaper had three defiant articles on the trade war in the physical newspaper Friday.

A front page commentary from the Communist Party's propaganda department headlined 'No Power Can Stop the Chinese People from Achieving Their Dream' said "the trade war will not cripple China, it will only strengthen us as we endure it," citing the hardships China has overcome from the Opium War to floods to the SARS epidemic in 2002-2003.

There were two editorials on page three, with one saying "China doesn't intend to change or replace the U.S., and the U.S. can't dictate to China or hold back our development." The other said claims from some officials in the U.S. that they have "rebuilt" China over the past 25 years are "outrageous" and shows their vanity, ignorance and distorted mentalities.

[May 18, 2019] 'US already spying on public, Huawei threat unproven' Swann

Trump is a bully and he does not have any methods of diplomacy other then bulling.
May 16, 2019 | www.youtube.com

US President Donald Trump declared a national emergency over Huawei, which he has deemed a national security threat. His new executive order makes it more difficult for US companies to do business with the Chinese tech giant. RT America's Manila Chan chats with investigative journalist Ben Swann, who says no evidence exists for the Trump administration's claim. #RTAmerica #InQuestionRT #QuestionMore


US Of Zion , 2 days ago

What US bans I will buy. Huawei has profited from Trump's tweets. 😂😂😂

riva2003 , 2 days ago

National emergency against one single company? What a promotion for HUAWEI! They must have paid US government a looooot of money! LOOOOOL

E Walker , 2 days ago (edited)

U.S. cannot spy via Chinese made technology products. That is the problem. When did competition against American technology get to be a national security threat? It is about creating a monopoly of only certain products in America. I hope American companies fight back. Prices in American stores have already started to rise. Monopolies mean high prices.

BTV-Channel , 2 days ago div

In the age of technology...any country who doesn't SPY on other countries or their own citizens is LYING thru their teeth! USA is NO DIFFERENT than CHINA.....they both are rogue nations, competing for the same thing, TECHNOLOGY LEADERSHIP! The problem is....HUAWEI just got the upper hand in 5G technology before the US can compete...so as such, the US threatens other countries with scare tactics until the US can develop and deploy 5G technology to compete with CHINA. It's all about MONEY and BUSINESS.

OGASI , 2 days ago

USA has dishonestly gathered more data on it's own civilians than it can access or understand in several lifetimes, they have the gaul to attack others without proof? UNREAL

[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